25 Jun Delhi High Court Rules in Favor of Assessee: Personal Hearing Opportunity Required in GST Case
Introduction
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, 2024], ruled that an opportunity for a personal hearing should be granted to the assessee. The court remitted the matter back to the authorities, emphasizing the importance of providing a fair chance to the petitioner to be heard in person.
Facts of the Case
M/s. Shree Padma Industries (“the Petitioner”) was served a Show Cause Notice dated September 29, 2023 (“the Impugned SCN”) in reference to FORM GSTR-01, stating that there was an excess claim of ITC under Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”). The notice included Annexure-B, detailing the reasons under separate headings. The Proper Officer (“the Respondent”) demanded INR 9,04,200/- including the penalty in the Impugned SCN.
The Petitioner requested access to the tabular chart in Annexure B and activation of the GST Portal to file a reply. However, an order dated December 12, 2023 (“the Impugned Order”) was passed, disposing of the demand proposed in the Impugned SCN, stating that the Petitioner neither filed a reply nor appeared for the Personal Hearing despite reminders and opportunities provided through the GST portal.
Aggrieved by the Impugned Order, the Petitioner filed the present writ petition.
Issue
Whether an opportunity for a 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 follows:
- Annexure-B and Communication: The Court observed that the Impugned Notice specifically mentioned an Annexure-B. The Petitioner claimed to have requested a copy of Annexure-B to file a reply, but neither was it provided, nor was the Petitioner informed about its non-existence. It was only during these proceedings that the Respondents clarified there was no Annexure-B and that the table in the Impugned SCN contained all the details.
- Reason for Impugned Order: The Court noted that the sole reason for passing the Impugned Order was the Petitioner’s failure to file a reply to the Impugned SCN. Given the Respondents' clarification about Annexure-B, the Court opined that one opportunity should be granted to the Petitioner to respond to the Impugned SCN.
- Directions for Re-adjudication: The Court directed that the Petitioner should file a further reply to the Impugned SCN within two weeks from the date of the order. The Respondent should then re-adjudicate the Impugned SCN, providing an opportunity for a personal hearing to the Petitioner and pass a fresh speaking order in accordance with the law within the period prescribed under Section 75 (3) of the CGST Act.
Thus, the Impugned Order was set aside, and the matter was remitted back for reconsideration with an opportunity for the Petitioner to be heard in person.
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