Fino Paytech Limited vs. Union Of INDIA Thr. Sec. Ministry Of Finance And Anr

Facts

The petitioner, Fino Paytech Limited, filed a writ petition challenging a show-cause-notice dated December 30, 2020, and an Order-in-Original dated August 30, 2022, passed by the Commissioner, CGST & Central Excise, Belapur. The petitioner argued that the Order-in-Original was passed ex-parte and in breach of natural justice because the show-cause-notice was not served on its correct address. The petitioner had updated its address on the GST portal twice, first on October 23, 2019, and then on December 5, 2019. The show-cause-notice was issued to an address that predated even the first address change. The respondents, in their reply affidavit, admitted that the petitioner had amended its address on the GST portal twice but proceeded to send notices to the old address under the belief that the petitioner was still operating from there.

Held

The Court held that the impugned Order-in-Original dated August 30, 2022, was passed in breach of the principles of natural justice. The reasoning was that the petitioner had duly updated its address on the GST portal on October 23, 2019, and December 5, 2019, which was admitted by the respondents. However, the show-cause-notice dated December 30, 2020, was sent to an address that was prior to the first address change. As a result, the show-cause-notice was not served on the petitioner, preventing them from filing a reply or presenting a valid defense. The Court found that even if the petitioner became aware of the proceedings later, the initial lack of proper service rendered the adjudication unfair. The Court also rejected the respondent's objection regarding the availability of an alternative remedy, citing Supreme Court judgments that permit High Courts to exercise writ jurisdiction under Article 226 when there is a breach of natural justice, irrespective of an alternate remedy. The Court quashed the Order-in-Original and remanded the proceedings to the Adjudicating Officer for a fresh adjudication after granting the petitioner an opportunity to file a reply and be heard.

Key Issues

1. Whether the Order-in-Original dated August 30, 2022, passed by the Respondent No. 2, is liable to be quashed and set aside on the ground of being passed ex-parte and in breach of the principles of natural justice, particularly concerning the service of the show-cause-notice dated December 30, 2020? (Question of mixed law and fact, concerning principles of natural justice and procedural fairness under GST law). Petitioner's Arguments: The petitioner contended that the show-cause-notice was not served on its last known valid address, which had been updated on the GST portal on October 23, 2019, and December 5, 2019. Consequently, the petitioner was denied an opportunity to respond to the show-cause-notice and present its defense, leading to an ex-parte adjudication and breach of natural justice. They relied on the admission in the respondent's reply affidavit regarding the address changes on the GST portal. Respondent's Arguments: The respondent opposed the petition, relying on their reply affidavit. While they claimed the petitioner did not respond to notices and sought adjournments, the judgment notes it was unclear from their affidavit whether the show-cause-notice was validly served on the petitioner's correct address. The respondent also raised an objection regarding the maintainability of the writ petition due to the availability of an alternative remedy of appeal.