Case Law Details
M. B. Travels Vs Assistant Commissioner (ST) (Madras High Court)
In the case of M. B. Travels v. Assistant Commissioner (ST), the Madras High Court addressed the challenge against an order dated 20th November 2023 primarily on the grounds of denial of a personal hearing. The petitioner contended that they were unaware of the proceedings leading to the impugned order because the notice and order were uploaded solely on the GST portal, without communication through other prescribed modes under Section 169 of the GST enactments.
The petitioner’s counsel highlighted several deficiencies in the order: firstly, the absence of a specified date for personal hearing both in the reference column and within the body of the order itself. It was argued that this omission deprived the petitioner of a fair opportunity to present their case. The petitioner, through counsel, offered to remit 10% of the disputed tax demand as a condition for the matter to be remanded.
On behalf of the respondent, Mr. V. Prashanth Kiran, the learned Government Advocate, accepted notice and pointed out that the impugned order followed a series of procedural steps including a notice in Form ASMT 10 dated 11th July 2023, a show cause notice issued on 18th August 2023, and multiple notices for personal hearings. The respondent argued that as a registered person under the GST enactments, the petitioner was obligated to monitor the GST portal regularly. Thus, the petitioner’s claim of ignorance regarding the proceedings was deemed unsatisfactory. The impugned order had confirmed the tax proposal due to the petitioner’s failure to respond to the show cause notice or participate in the proceedings.
After considering the arguments, the High Court observed that while the petitioner had a responsibility to monitor the GST portal, the absence of specific dates for personal hearing in the order raised legitimate concerns about procedural fairness. Consequently, the court set aside the order dated 20th November 2023 and remanded the matter for reconsideration, with the condition that the petitioner remit 10% of the disputed tax demand within two weeks. During this period, the petitioner was granted the opportunity to submit a reply to the show cause notice and provide relevant documents.
Furthermore, the court directed the respondent to afford the petitioner a reasonable opportunity to present their case, including a personal hearing. A fresh order was mandated to be issued within three months from the date of receipt of the petitioner’s reply.
In reaching this decision, the High Court balanced the procedural lapses noted in the impugned order with the petitioner’s right to a fair hearing. The court underscored that despite the petitioner’s duty to monitor the GST portal, procedural safeguards such as timely communication and clarity in scheduling personal hearings are essential to uphold principles of natural justice.
Ultimately, the writ petition was disposed of in accordance with the aforementioned terms, without imposing any costs on either party. Connected miscellaneous petitions were also closed in light of the court’s decision.
This case underscores the significance of procedural regularity and the duty of authorities to ensure that taxpayers are provided with adequate opportunities to participate in proceedings and present their case effectively. It reaffirms the judiciary’s role in safeguarding the principles of natural justice in administrative and quasi-judicial proceedings under GST enactments.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order in original dated 20.11.2023 is assailed primarily on the ground of denial of a personal hearing.
2. The petitioner asserts that he was unaware of proceedings culminating in the order impugned herein because the notice and order were uploaded on the GST portal and not communicated to the petitioner through any of the other modes prescribed in Section 169 of applicable GST enactments.
3. Learned counsel for the petitioner invited my attention to the impugned order and pointed out that the alleged date of personal hearing is blank in the reference column. Similarly, he submits that the date of personal hearing is blank in the body of the order. On instructions, he submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.
4. Mr. V. Prashanth Kiran, learned Government Advocate, accepts notice for the respondent. He points out that the impugned order was preceded by a notice in Form ASMT 10 dated 11.07.2023, show cause notice dated 18.08.2023 and more than one personal hearing notice.
5. As a registered person under applicable GST enactments, the petitioner was under an obligation to monitor the GST portal on an ongoing basis. Therefore, the explanation provided by the petitioner is wholly not satisfactory. At the same time, on perusal of the impugned order, it is evident that the tax proposal was confirmed because the petitioner did not reply to the show cause notice or participate in proceedings. In these circumstances, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits, albeit by putting the petitioner on terms.
6. For reasons set out above, the impugned order dated 20.11.2023 is set aside and the matter is remanded for reconsideration on 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. Within the aforesaid period, the petitioner is permitted to submit a reply to the show cause notice and annex relevant documents. 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 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. M. B. Travels Vs Assistant Commissioner (ST) (Madras High Court)
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