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Non-Providing Proper Opportunity of Personal Hearing before the Tax
Demand confirmed is a Violation of Principles of Natural Justice
By Yogesh
Verma (CS/LLB) / 2 min. read / GST Case
Law
Case Title: M/s. Alliance Granimarmo Pvt. Ltd. vs
The Assistant Commissioner (ST) (FAC) & Others
Case Number: W.P.
No. 9064 of 2024
Date of
Order: 07.08.2024
Name of the
Court: High Court of Judicature at Madras
Presiding
Judge: The Honourable Mr. Justice Krishnan
Ramasamy
Summary of the Case:
The petitioner, M/s.
Alliance Granimarmo Pvt. Ltd., sought to quash an order passed by the first
respondent on the grounds of not being given a proper opportunity for a
personal hearing before the tax demand was confirmed. The court found that
there had been a violation of the principles of natural justice and remitted
the matter back to the authorities for reconsideration.
Facts of the Case:
1. The petitioner, M/s.
Alliance Granimarmo Pvt. Ltd., was issued a show cause notice (Form DRC-01) on
27.09.2023 by the respondents, alleging excess Input Tax Credit (ITC) on inputs
taxable under the Reverse Charge Mechanism (RCM) and non-reversal of ITC on
credit notes.
2. The petitioner sought
an adjournment for the personal hearing scheduled on 15.12.2023 due to the
illness of their Finance Manager. The second respondent granted the adjournment
and rescheduled the hearing to 28.12.2023.
3. However, when the
petitioner appeared for the hearing on 28.12.2023, they were informed that the
impugned order had already been passed on 26.12.2023, confirming a tax demand
of ₹1,95,89,806/- each under CGST and SGST and ₹3,38,982/- under IGST, along
with interest and penalty.
4. The petitioner
contended that this was a violation of the principles of natural justice as the
adjournment had been granted, but the order was passed without affording them
the opportunity for a proper hearing.
Submission by
Petitioner:
The petitioner's counsel,
Mr. G. Natarajan, argued that the impugned order was passed without giving the
petitioner another opportunity for a personal hearing, despite their request
for an adjournment. The petitioner had already paid 10% of the disputed tax
demand and requested the court to grant another opportunity to present
their case before the assessing authority.
Submission by
Respondent:
The respondent's counsel,
Mr. C. Harsha Raj (Additional Government Pleader), stated that the matter could
be reconsidered, subject to the verification of the 10% payment made by the
petitioner.
Findings and Judgement of
the Court:
1. The court observed
that the petitioner had sought an adjournment for a personal hearing, which had
been granted by the second respondent. However, the first respondent passed the
impugned order without providing the petitioner with the opportunity to present
their case, constituting a violation of natural justice.
2. The court set aside
the impugned order dated 26.12.2023 and remitted the matter back to the first
respondent for reconsideration.
3. The petitioner was
directed to file their reply within two weeks from the date of receipt of the
court's order, and the first respondent was instructed to afford a personal
hearing with a notice period of 14 days before passing the final order.
Conclusion: The
court set aside the impugned order and directed the authorities to reconsider
the case, providing the petitioner with a fair opportunity to be heard.
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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