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Not
being provided with a reasonable opportunity to respond constitutes a violation
of the principles of natural justice
Case Summary: M/s. Greater Chennai Fine Stamping Private Ltd. vs.
Deputy State Tax Officer – 1 & Another
Case No.: W.P.No.21017
of 2024
Date of Order:
09.08.2024
Court: High
Court of Judicature at Madras
Judge: Honourable
Mr. Justice Krishnan Ramasamy
Facts of the Case:
The petitioner, M/s.
Greater Chennai Fine Stamping Private Ltd., challenged the orders passed by the
respondents imposing tax and interest under various proceedings initiated
between April 2022 and December 2023. The core issue involved was the delayed filing
of returns for the period from 01.07.2017 to 31.03.2018, which led to the levy
of interest under Section 50(1) of the GST Act at a rate of 18%. The petitioner
argued that they never received the notices issued by the respondents through
email, registered post, or speed post. They contended that multiple demand
orders were issued for the same subject matter, which violated principles of
natural justice.
Submissions by the
Petitioner:
The petitioner contended
that the respondents failed to provide a reasonable opportunity to respond, as
none of the notices were received by the petitioner. They argued that issuing
multiple demand orders for the same issue was a violation of the CBIC guidelines,
particularly Instruction No.01/2022-GST dated 07.01.2022, which emphasizes
providing an opportunity for short payment or non-payment of self-assessed tax
liability.
Submissions by the
Respondent:
The respondents submitted
that the petitioner failed to reply to any of the notices within the stipulated
time. They argued that the orders were passed based on the petitioner’s
non-compliance with the notice requirements, and the court should pass suitable
orders considering the petitioner’s inaction.
Findings and Judgement of
the Court:
The court found that the
petitioner was not provided with a reasonable opportunity to respond, which is
a violation of the principles of natural justice. Consequently, the court set
aside the orders dated 17.04.2023 and 19.10.2023. However, the court conditioned
this relief on the petitioner depositing 10% of the disputed tax demand within
four weeks from the date of the order. The petitioner was also directed to file
a reply within two weeks, after which the respondents were to set a date for a
personal hearing and pass orders on merits in accordance with the law.
Conclusion: The
orders passed by the respondents were set aside due to the violation of natural
justice, subject to the petitioner fulfilling the conditions set by the court.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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