Case Law Details
Shree Padma Industries Vs Union of India & Ors. (Delhi High Court)
The Hon’ble Delhi High Court in the case of M/s. Shree Padma Industries v. Union of India [Writ Petition (Civil) No. 6274 of 2024 dated May 17, 2014] remitted back the matter and it was held that that the one opportunity of being heard should be granted to the Assessee.
Facts:
M/s. Shree Padma Industries (“the Petitioner”) was served a Show Cause Notice dated September 29, 2023 (“the Impugned SCN”) issued in reference to FORM GSTR-01 which stated that working of excess ITC under Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) was appended to the Notices as Annexure-B and had given reasons under separate headings i.e. excess claim of ITC and scrutiny of ITC availed. The Proper Officer (“the Respondent”) in the Impugned SCN demanded INR 9,04,200/- including the penalty.
The Petitioner requested to provide the tabular chart annexed in Annexure B and further activate the GST Portal to enable the Petitioner to file the reply to the Impugned SCN.
However, an Order dated December 12, 2023, was passed (“the Impugned Order”) whereby the demand proposed in the Impugned SCN was disposed of. It stated that the Noticee had neither filed a reply/explanation within the stipulated period nor appeared for the Personal Hearing before the Respondent on the given date and time. Further, another opportunity was provided to submit reply and for the sake of natural justice opportunity for a Personal Hearing was also accorded to the Noticee by issuing “REMINDER” through the GST portal. Now, since no reply/explanation has been received from the Noticee despite sufficient and repeated opportunities, it indicated that the Noticee has nothing to submit in the matter.
In view of the aforesaid circumstances, the Respondent was left with no other option but to decide the matter ex-parte, in accordance with the provisions of the CGST Act, as per discrepancies already conveyed through the Impugned SCN. The Respondent opined that despite providing another opportunity, neither an online reply was filed nor the Petitioner appeared in person or through an authorized representative.
Hence, aggrieved by the Impugned Order, the Petitioner filed the present writ petition.
Issue:
Whether an opportunity of personal hearing should be granted to the Assessee?
Held:
The Hon’ble Delhi High Court in Writ Petition (Civil) No. 6274 of 2024 held as under:
- Observed that, the Impugned Notice specifically stated that there was an Annexure – B to the Impugned Notice. The Petitioner claimed to have requested the Respondent for a copy of Annexure – B to enable it to file a reply. Neither copy of Annexure B was supplied nor was the Petitioner informed that there is no Annexure-B. It is only for the first time in these proceedings that the Respondents state that there is no Annexure-B and the table contained in the Impugned SCN contains all the details.
- Noted that, the only reason for passing the Impugned Order is that the Petitioner had not filed any reply to the Impugned SCN. In view of the stand of the Respondents that there is no Annexure-B, in view of the Hon’ble Delhi Court one opportunity needs to be granted to the Petitioner to respond to the Impugned SCN.
- Held that, Petitioner shall file a further reply to the Impugned SCN within two weeks from today. Thereafter, the Respondent shall re-adjudicate the Impugned SCN after giving an opportunity of personal hearing to the Petitioner and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75 (3) of the Act. Hence, the Impugned Order.
Our Comments:
Section 75 of the CGST Act talks about “General provisions relating to determination of tax”. Section 75(4) of the CGST Act states that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty or where any adverse decision is contemplated against such person.
The Hon’ble Gujarat High Court in Alkem Laboratories Ltd. v. Union of India [R/Special Civil Application No. 994 of 2021, decided on February 4, 2021] quashed and set aside the order on the ground that no opportunity of a personal hearing was given and held that one opportunity shall be given to appear and to defend the case.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
Petitioner impugns order dated 12.12.2023 whereby the impugned Show Cause Notice dated 29.09.2023 proposing a demand of Rs. 9,04,200.00/- against the petitioner had been disposed of and demand including penalty has been raised against the petitioner. The order has been passed under Section 73 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the Act).
2. Learned counsel for Petitioner submits that the Show Cause Notice dated 29.09.2023, issued in Form GSTR-01, stated that the working of Excess ITC under section 16(2)(c) of the Act was appended to the Notice as Annexure-B. Petitioner appeared before Respondent No. 3 and requested it to provide the tabular chart annexed as Annexure-B and further to activate the GST portal to enable the Petitioner to file the reply to show cause notice.
3. Learned counsel for the Respondent, under instructions, submits that there is no Annexure-B to the Show Cause Notice as mentioned in the attachment to the Show Cause Notice. He submits that Annexure-B is in tabular form, which is extracted in the said document itself and as such, there is no separate Annexure-B.
4. Perusal of the Show Cause Notice dated 29.09.2023 shows that the Department has given reasons under separate headings i.e., excess claim of ITC and scrutiny of ITC availed.
5. The impugned order, however, after recording the narration records that demand as ex-parte is created. It states that “And whereas, it is noticed that the Taxpayer neither filed reply/explanation within stipulated period nor appeared for Personal Hearing before Proper Officer on the given date and time. Further, another opportunity to submit reply and for the sake of natural justice opportunity for Personal Hearing, as per provision of Section 75(4) DGST Act, was also accorded to the taxpayer by issuing “REMINDER” through the GST portal. ****** Now, since no reply / explanation has been received from the taxpayer despite sufficient and repeated opportunities, which indicates that the taxpayer has nothing to submit in the matter. In view of aforesaid circumstances, the undersigned is left with no other option but to decide the matter ex-parte, in accordance with the provisions of CGST / DGST Act & Rules, 2017, as per discrepancies already conveyed through SCN/ DRC-01.” The Proper Officer has opined that despite providing another opportunity, neither an online reply has been filed nor has the petitioner appeared in person or through an authorized representative.
6. It may be noticed that the Show Cause Notice specifically states that there is an Annexure – B to the show cause notice and Petitioner claims to have requested the Proper Officer for a copy of Annexure – B to enable it to file a reply. Neither copy of Annexure B was supplied nor was petitioner informed that there is no annexure-B. It is only for the first time in these proceedings that the Respondents state that there is no Annexure-B and the table contained in the Show Cause Notice contains all the details.
7. The only reason for passing the impugned order is that petitioner had not filed any reply to the Show Cause Notice. In view of the stand of the Respondents that there is no Annexure-B, we are of the view that one opportunity needs to be granted to the Petitioner to respond to the Show Cause Notice.
8. Accordingly, the impugned order dated 12.12.2023 is set aside. The Show Cause Notice is remitted to the Proper Officer for re-adjudication.
9. Petitioner shall file a further reply to the Show Cause Notice within two weeks from today. Thereafter, the Proper Officer shall re-adjudicate the Show Cause Notice after giving an opportunity of personal hearing to the Petitioner and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75 (3) of the Act.
10. It is clarified that this Court has neither considered nor commented upon the merits of the contentions of either party. All rights and contentions of parties are reserved.
11. The challenge to Notification No. 9 of 2023 with regard to the initial extension of time is left open.
12. Petition is disposed of in the above terms.
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