Month: June 2024

Personal Hearing not granted – Assessee was not acquainted with GST Portal – Order Set Aside

Citation:

Tvl. Samikannu Mariappan Vs. State Tax Officer,

W.P. No. 15509 of 2024, [2024] 164 taxmann.com 275 (Madras)

High Court of Madras

Facts of the Case:

  1. Petitioner, an octogenarian, whose Turnover is below GST Threshold, has engaged a Local Auditor for ensuring GST Compliances.
  2. Counsel for Petitioner submits that if provided an opportunity, the petitioner would be able to establish that the demand is liable to be dropped.
  3. It was held that since the present order was passed on Best Judgment basis without providing Opportunity of being heard, the same is set aside.
  4. Department is directed to provide opportunity of being heard, including personal hearing and thereafter issue a fresh order.

Section 75(4) of 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.

Personal Hearing not granted – Assessee was not acquainted with GST Portal – Order Set Aside

Citation:

Tvl. Samikannu Mariappan Vs. State Tax Officer,

W.P. No. 15509 of 2024, [2024] 164 taxmann.com 275 (Madras)

High Court of Madras

Facts of the Case:

  1. Petitioner, an octogenarian, whose Turnover is below GST Threshold, has engaged a Local Auditor for ensuring GST Compliances.
  2. Counsel for Petitioner submits that if provided an opportunity, the petitioner would be able to establish that the demand is liable to be dropped.
  3. It was held that since the present order was passed on Best Judgment basis without providing Opportunity of being heard, the same is set aside.
  4. Department is directed to provide opportunity of being heard, including personal hearing and thereafter issue a fresh order.

Section 75(4) of 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.

Similar Decision:

Personal Hearing was not granted even after requesting for the same – Order Set Aside

Personal Hearing was not granted even after requesting for the same – Order Set Aside

Citation:

Tvl. Town & City Developers Vs. State Tax Officer (Intelligence)

W.P. Nos. 11579, 11591 & 11595 of 2024 – High Court of Madras

[2024] 163 taxmann.com 547 (Madras)

Issue Involved:

Order-in-Original exceeded jurisdiction by applying GST at 5% instead of 1% merely on the allegation of non-compliance with Notification No.3/2019 – Central Tax (Rate) dated 29.03.2019. Personal Hearing was not granted in spite of requesting for the same in the Reply to the Show Cause Notice.

Other Grounds of Appeal:

  1. Essential Ingredients for invoking Section 74 are not contained in the Show Cause Notice.
  2. Impugned Order does not make reference to the petitioner’s replies (This ground was not sustained)

Held:

Order Set aside subject to the petitioner making 5% of tax disputed within two weeks.

Provisions relating to Personal Hearing: Section 75 – General Provisions relating to Determination of Tax:

75(4) – 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.

75(5) – The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing:

Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.

Detailed Reply submitted is not considered – Matter remanded back for re-adjudication

Citation:

Sethia Enterprises Vs. Commissioner, Delhi Goods and Service Tax

Delhi High Court – W.P. (C) No. 7730 of 2024

[2024] 163 taxmann.com 381 (Delhi)

Facts:

  1. Show Cause Notice was issued u/s. 73 dated 12th December 2023 for demand of Rs. 12,42,094 proposing penalty and Order was issued dated 24th April 2024.
  2. Demand is raised under the headings:
    • Net tax under declared due to non-reconciliation of turnovers in other returns and E-way bill information,
    • reconciliation of GSTR-1 with GSTR-3B;
    • excess claim of Input Tax Credit (ITC);
    • excess ITC claimed on account of non-reconciliation and
    • Excess ITC availed in GSTR-3B compared to GSTR-2A/2B.
  3. Petitioner states that he has submitted a detailed reply dated 12th January 2024 along with relevant documents under each of the given heads, but the same is not taken into consideration in the Order and the Order is cryptic.
  4. Order States that reply is not satisfactory as the taxpayer has not attached sufficient documents in support of the reply. Extracts from the Order:
    • And whereas, it is noticed that the Taxpayer filed reply/explanation within stipulated period and did not appear 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 provisions of Section 75(4) DGST Act, was also provided to the taxpayer by issuing reminder through the GST portal.
    • Now, since no satisfactory explanation has been received from the taxpayer despite sufficient and repeated opportunities, which indicate that the taxpayer has nothing to say in the matter.
    • The taxpayer has not attached sufficient documents in support of his reply i.e. invoices, proof of payment etc. Hence, in view of aforesaid circumstances, the undersigned is left with no other option to create demand ex-parte.
  5. Findings of the Hon’ble Delhi High Court:
    • The observation in the impugned order dated 24.04.2024 is not sustainable for the reasons that the reply dated 12.01.2024 filed by the Petitioner is a detailed reply with supporting documents. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is not satisfactory and taxpayer has not attached sufficient documents in support of his reply which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner.
    • Further, if the Proper Officer was of the view that any further details were required, the same could have been specifically sought from the Petitioner. However, the record does not reflect that any such opportunity was given to the Petitioner to clarify its reply or furnish further documents/details.
  6. Held by Hon’ble Delhi High Court that:
    • Impugned Order dated 24th April 2024 is set aside. The Show Cause Notice is remitted to the Proper Officer for re-adjudication.
    • Petitioner can file a further reply within 30 days. After granting personal Hearing, the PO shall pass a speaking order within the period prescribed u/s. 75(3)
    • The Court has not commented upon the Merits.

Section 75(3) of CGST Act: Where any order is required to be issued in pursuance of the direction of the Appellate Authority or Appellate Tribunal or a court, such order shall be issued within two years from the date of communication of the said direction.

Section 75(4) of CGST Act: 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.