Surinderpal Chamanlal Aggarwal HUF - Metals And General Trading Co. vs. State Of Maharashtra

Held

The Court held that there was a failure of natural justice. The impugned order extensively relied upon three documents (References 1, 2, and 3) which were neither referred to in the show cause notice nor supplied to the petitioner. The petitioner only became aware of these documents after receiving the impugned order. The Court found that since these documents formed a substantial basis for the order, the petitioner should have been furnished copies or at least made aware of their proposed use in the show cause notice. The Court rejected the revenue's contention that the petitioner was made aware of relevant statements during the final hearing, as the affidavit was silent regarding the specific three documents in question. Consequently, the impugned order was set aside solely on the ground of failure of natural justice, without adverting to the merits of the case. The matter was remanded to the adjudicating officer for a fresh decision, with a direction to furnish copies of the relied-upon documents and any other material to the petitioner, allowing a reasonable opportunity to deal with them and providing a proper hearing. All contentions on merits were left open.

Facts

The petitioner, Surinderpal Chamanlal Aggarwal HUF, challenged an Order-in-Original dated April 30, 2024, passed by the Assistant Commissioner of State Tax. The petitioner argued that the impugned order was passed in gross violation of the principles of natural justice. Specifically, the petitioner contended that the order relied heavily on three documents (References 1, 2, and 3) which were neither mentioned in the show cause notice nor supplied to the petitioner. Consequently, the petitioner had no opportunity to address these documents before the order was passed. The revenue, represented by the Additional Government Pleader, argued that the petitioner was made aware of certain statements during the final hearing and that the main issue of the supplier being a Non-Genuine Tax Payable (NGTP) was clear in the show cause notice, giving the petitioner a full opportunity to establish the genuineness of transactions.

Key Issues

1. Whether the impugned order dated April 30, 2024, passed by the Assistant Commissioner of State Tax, is liable to be set aside on the ground of gross violation of the principles of natural justice, specifically concerning the non-furnishing of documents relied upon in the order? Petitioner's Arguments: The petitioner contended that the impugned order relied extensively on three specific documents (References 1, 2, and 3) which were not mentioned in the show cause notice and copies of which were never supplied. This lack of disclosure prevented the petitioner from dealing with crucial evidence, thus violating the principles of natural justice. The petitioner argued that even if an alternate remedy exists, a Writ Court can intervene when there is a clear violation of these fundamental principles. Revenue's Arguments: The revenue argued that the petitioner was made aware of certain statements during the final hearing, specifically regarding the supplier being a Non-Genuine Tax Payable (NGTP). It was submitted that the petitioner had a full opportunity to establish the genuineness of their transactions and therefore, there was no violation of natural justice. The revenue referred to an affidavit stating that a representative of the petitioner was made aware of statements made by the director of the supplier company.