M/S Lubrizol INDIA PVT. LTD. vs. Commissioner Of State Tax And Ors
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The petitioner, M/s. Lubrizol India Pvt. Ltd., is challenging a show cause notice dated December 15, 2020, issued by the Commissioner of State Tax, which proposed to charge interest under Section 50 of the GST Act, 2017. The petitioner was required to reply by December 28, 2020, but instead filed a writ petition on March 26, 2021. The petitioner did not seek a stay on proceedings. Subsequently, on December 21, 2023, the Revenue issued an order directing the petitioner to pay the interest within 90 days, which was also not challenged in the petition. The petitioner contended that the delay in responding was due to the second wave of COVID-19 and potential technical glitches.
Held
The Court decided to grant the petitioner an opportunity to respond to the show cause notice. The reasoning was that if the petitioner could satisfy the Adjudicating Authority about the technical glitches and their inability to make payments on the due date, the matter might be resolved. The Court directed the petitioner to file a reply to the show cause notice within three weeks. The Adjudicating Authority was instructed to pass a reasoned order, considering all submissions, and to provide a personal hearing to the petitioner at least five working days in advance. The Adjudicating Authority was to pass the order by September 30, 2024. The Court did not quash the order dated December 21, 2023, as it was stated to be subject to the outcome of this petition, leaving it open for modification by the Adjudicating Authority. The Court explicitly stated that no observations were made on the merits of the matter. The ratio decidendi is that procedural fairness and opportunity to be heard should be granted, especially when there are plausible reasons for delay, even if the delay is significant, provided the Adjudicating Authority can still address the issues.
Key Issues
1. Whether the Petitioner should be granted an opportunity to respond to the show cause notice dated December 15, 2020, considering the intervening circumstances of the COVID-19 pandemic and alleged technical glitches. (Mixed question of law and fact, turning on principles of natural justice and procedural fairness). Petitioner's arguments: The petitioner argued that the second wave of COVID-19 prevented them from responding to the notice on time and that technical glitches also contributed to the delay. They sought an opportunity to present their case to the Adjudicating Authority. Revenue's arguments: The Revenue strongly opposed granting further time to the petitioner, emphasizing the delay in filing the petition and the subsequent issuance of the order dated December 21, 2023, which was not challenged.
Sections Cited
Section 50
AI-generated summary — verify with the full judgment below
1/2 448.WP-64-2022.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURI ICTION WRIT PETITION NO.64 OF 2022 M/s. Lubrizol India Pvt. Ltd.
….Petitioner V/s. Commissioner of State Tax & Anr. .…Respondents ---- Ms. Lalita Phadke a/w. Ms. Nidhi Karandikar i/b. Mr. H.G. Dharmadhikari for petitioner. Ms. S.D. Vyas, Addl. GP a/w. Mr. M.M. Pabale, AGP for State. ----
CORAM : K.R. SHRIRAM & JITENDRA JAIN, JJ.
DATED : 2nd JULY 2024 P.C. : 1 Petitioner is impugning a show cause notice dated 15th December 2020, copy whereof is at Exhibit “Y” to the petition, by which petitioner has been called upon to respond as to why interest should not be charged under Section 50 of the GST Act, 2017. Petitioner was to reply by 28th December 2020. Petitioner did not reply and instead filed a petition which was lodged only on or about 26th March 2021. 2 Even after the petition was filed, petitioner did not move for stay of the proceedings and almost three years later, by an order dated 21st December 2023, which has been brought on record in the rejoinder, the Revenue has called upon petitioner to pay the interest within 90 days. Even this order has not been challenged in the petition. 3 Ms. Phadke states that after the impugned notice was received, the second wave of COVID had set in and, therefore, an opportunity be Gauri Gaekwad 2024:BHC-AS:26235-DB
2/2 448.WP-64-2022.doc given to petitioner to respond to the notice dated 15th December 2020. Though Ms. Vyas strongly opposed any further time being granted, in our view, if petitioner is able to satisfy the Adjudicating Authority that there was a technical glitch as submitted by Ms. Phadke and hence, petitioner was not able to make the payments on the due date, perhaps the matter could be resolved. 4 In the circumstances, we pass the following order : (a) Petitioner shall file a reply to the show cause notice dated 15th December 2020 within three weeks from today; (b) The Adjudicating Authority shall pass a reasoned order dealing with all submissions of petitioner, but before passing any order, shall give a personal hearing to petitioner, notice whereof shall be communicated atleast five working days in advance. The order to be passed by 30th September 2024. (c) We are not quashing the order dated 21st December 2023 because the order itself says it is subject to the orders of Hon’ble Mumbai High Court in WP (ST.)/8095/2021, which is this petition. Therefore, the Adjudicating Authority, in our view, has left it open to modify the said order dated 21st December 2023. 5 Petition disposed. 6 We clarify that we have not made any observation on the merits of the matter. (JITENDRA JAIN, J.) (K.R. SHRIRAM, J.) Gauri Gaekwad Signed by: Gauri A. Gaekwad Designation: PS To Honourable Judge Date: 05/07/2024 10:33:38
Reproduced from the public record of the Bombay High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.