Case Law Details
Navbharat Boilers Vs Assistant Commissioner (Madras High Court)
The case of Navbharat Boilers vs Assistant Commissioner at the Madras High Court centers on a dispute regarding alleged wrongful availment of Input Tax Credit (ITC) by the petitioner, a registered entity under GST enactments. The petitioner challenges an order dated 16.08.2023, citing a breach of principles of natural justice.
The petitioner contends that they were not provided a reasonable opportunity to contest the tax demand on its merits. Despite references to a personal hearing in the impugned order, the petitioner asserts that no such hearing was conducted. Furthermore, they claim that the show cause notice and the impugned order were only uploaded on the GST portal, not communicated through any other mode.
On the other hand, the government pleader representing the respondent argues that sufficient opportunity was provided to the petitioner before issuing the impugned order. The impugned order confirms the tax demand due to the petitioner’s failure to respond to the show cause notice or participate in the personal hearing.
Considering the circumstances, the court sets aside the impugned order and remands the matter for reconsideration. However, it imposes the condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of the order. Additionally, the petitioner is allowed to submit a reply to the show cause notice within the same period.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 16.08.2023 is assailed on the ground of breach of principles of natural justice.
2. The petitioner is a registered person under applicable GST enactments. The petitioner asserts that the show cause notice and impugned order were uploaded on the “View Additional Notices and Orders” tab on the GST portal. It is further stated that the petitioner was unaware of proceedings because the notice and orders were not communicated to the petitioner through any other mode.
3. Learned counsel for the petitioner submits that the petitioner was not provided a reasonable opportunity to contest the tax demand on merits. He further submits that no personal hearing was provided although there is a reference thereto in the impugned order. On instructions, he submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.
4. Mr.T.N.C.Kaushik, learned Additional Government Pleader, accepts notice for the respondent. He points out that the petitioner has also filed a rectification petition dated 15.11.2023. In addition, he submits that sufficient opportunity was provided to the petitioner before issuing the impugned order.
5. On perusal of the impugned order, it is evident that the said order pertains to alleged wrongful availment of Input Tax Credit (ITC). The documents on record include the show cause notice dated 22.06.2023. From the impugned order, it appears that a personal hearing notice was issued on 17.07.2023. The impugned order further discloses that the tax demand was confirmed because the petitioner failed to respond to the show cause notice or participate in the personal hearing. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary to provide the petitioner with an opportunity to contest the tax demand on merits.
6. Solely for this reason, the impugned order dated 16.08.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice within the aforesaid period. Upon receipt of the petitioner’s reply and upon being satisfied that 10% of the disputed tax demand was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within a period of three months from the date of receipt of the petitioner’s reply.
7. The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.
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