Case Law Details
Sarat Shradha Infrastructure Pvt. Ltd. Vs Chief Commissioner of CT and GST (Orissa High Court)
Orissa High Court, in Sarat Shradha Infrastructure Pvt. Ltd. Vs Chief Commissioner of CT and GST, invalidated a GST demand notice issued under Section 74 of the Odisha Goods and Services Tax Act, 2017, for the financial year 2018-19. The demand notice dated February 17, 2021, failed to specify a date for a personal hearing, violating principles of natural justice. The petitioner highlighted this omission, arguing that the lack of a hearing date denied them the opportunity to present a defense. Additionally, the pandemic prevented the submission of a reply to the show-cause notice.
The Revenue defended the notice, asserting that a reply from the petitioner might have necessitated a hearing. However, the court acknowledged the defect in the show-cause notice, ruling that the omission of a hearing date invalidated the demand. Consequently, the court quashed the demand notice and granted the petitioner two weeks to file a reply, with the option to request a personal hearing. If no reply is filed, the quashed demand order will automatically be reinstated. This judgment underscores the necessity of adhering to procedural fairness in GST proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. Ms. Tripathy, learned advocates appear on behalf of petitioner. Ms. Tripathy submits, under challenge is demand notice dated 17th February, 2021 issued by the Sales Tax Officer pertaining to financial year 2018-19 issued under section 74 of Odisha Goods and Services Tax Act, 2017. She draws attention to show cause notice dated 17th February, 2021 to point out, in it there was direction to file reply as well as for personal hearing on dates and times mentioned in the table. Referring to the table she demonstrates, only date of filing show cause was given. Date for personal hearing was not given. It amounted to violation of principles of natural justice. On query made she submits, reply to the show cause could not be submitted because of the pandemic.
2. Das, learned advocate, Additional Standing Counsel appears on behalf of revenue and submits, a reminder was also given to file reply. It was presumed, on filing reply there may arise necessity of personal hearing, if at all. Otherwise, omission to file reply would mean the assessee has no defence to the demand. He relies on subsection (4) in section 75.
3. Petitioner is relying on directions given in the show cause notice. It was in respect of a demand. Any defect in the show cause notice would cause violation of principles of natural justice. On query made Mr. Das in fairness submits, time be extended for petitioner to file reply and thereafter in event personal hearing is sought, it will be given.
4. In view of aforesaid, impugned demand is set aside and quashed. Petitioner has two weeks from date to file reply to the show cause. In event it does file reply, in it request may be made for personal hearing or separately thereafter. In event the reply is not filed as directed, impugned order will stand automatically restored.
5. The writ petition is disposed of.
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