M/S Iti LTD vs. The Union Of INDIA And 6 Ors
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The petitioner, M/s ITI Ltd., filed a writ petition challenging the validity of Section 16(4) of the Central Goods and Services Tax Act, 2017 (CGST Act). They also challenged a Notification dated 31.03.2023 extending the time limit for passing orders under Section 73 of the CGST Act and an order dated 27.12.2023 issued by the Additional Commissioner, Central GST, Dibrugarh. The petitioner argued that while the insertion of sub-section (5) in Section 16 by the Finance Act, 2024, largely resolved their input tax credit grievance, the impugned order was passed without providing an opportunity of hearing. They requested the matter be remitted for fresh adjudication.
Held
The Court held that the impugned order dated 27.12.2023, passed by the Additional Commissioner, Central GST, Dibrugarh (Respondent No. 7), was to be set aside. The primary reasoning was the petitioner's submission that the order was passed without providing an opportunity of hearing, which is a fundamental principle of natural justice. Both parties agreed that the matter should be remitted back to the authority for fresh adjudication. The Court directed the respondent No. 7 to decide the matter afresh in accordance with the provisions of Section 16 of the CGST Act, as amended, including the newly introduced sub-section (5), and crucially, after providing an opportunity of hearing to the petitioner. The decision was to be made within a period of two months from the date of production of a certified copy of the order.
Key Issues
1. Whether the impugned order dated 27.12.2023, passed by the Additional Commissioner, Central GST, Dibrugarh, is liable to be quashed and set aside for being violative of principles of natural justice, specifically the right to a hearing, under the provisions of the CGST Act? Petitioner's arguments: The petitioner contended that the impugned order was passed without affording them an adequate opportunity of hearing. They further submitted that while the grievance regarding Section 16(4) of the CGST Act was substantially addressed by the insertion of sub-section (5) via the Finance Act, 2024, the procedural lapse in the impugned order necessitates a fresh adjudication. They relied on the principle of natural justice. Revenue's arguments: The respondents, represented by Mr. S.C. Keyal, S.C., GST, did not contest the petitioner's plea for remittance. They submitted that they had received instructions from the Department and agreed that the matter could be remitted back to the authority concerned for a fresh decision, taking into account the new amendment to Section 16(5) of the CGST Act.
Sections Cited
Section 16(4), Section 16(5), Section 73
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Page No.# 1/3 GAHC010008222024
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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/184/2024 M/S ITI LTD REP BY ITS AUTHORISED REP. SHRI MADHUSUDAN BISWAS ADDRESS OF PRINCIPAL PLACE OF BUSSINESS NEW COLONY TINSUKIA ASSAM 786125 VERSUS THE UNION OF INDIA AND 6 ORS REP BY THE SECRETARY TO THE GOVT OF INDIA MINISTRY OF FINANCE DEPTT OF REVENUE NEW BLOCK NEW DELHI 110001 2:THE UNION OF INDIA REP BY THE UNDER SECRETARY TO THE GOVT OF INDIA REVENUE MINISTRY OF FINANCE DEPTT OF REVENUE NEW BLOCK NEW DELHI 110001 3:GST COUNCIL REP BY THE CHAIRPERSON MINISTRY OF FINANCE NORTH BLOCK NEW DELHI 110001 4:CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS REP BY THE CHAIRPERSON NORTH BLOCK CENTRAL SECRETARIAT NEW DELHI 110001 5:GST NETWORK REP BY THE CHAIRPERSON MINISTRY OF FINANCE NORTH BLOCK NEW DELHI 110001 6:COMMISSIONER JOINT SECRETARY IN THE BOARD CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS NORTH BLOCK CENTARL SECRETARIAT NEW DELHI 110001
Page No.# 2/3 7:ADDITIONAL COMMISSIONER CENTRAL GST DIBRUGARH P.O. C R BUILDING DIBRUGARH 78600 For the petitioner : Mr. Puneet Agarwal, Advocate (through video-conferencing) Mr. H. Betala, Advocate For the respondents : Mr. S.C. Keyal, S.C., GST – B E F O R E – HON’BLE THE CHIEF JUSTICE MR. VIJAY BISHNOI HON’BLE MR. JUSTICE N. UNNI KRISHNAN NAIR 17-02-2025 (Vijay Bishnoi, C.J.) This writ petition is preferred on behalf of the petitioner essentially challenging the validity of Section 16(4) of the Central Goods and Services Tax Act, 2017 (hereinafter to be referred as “CGST Act”). The petitioner has prayed for quashing and setting aside the Notification dated 31.03.2023 issued by the Ministry of Finance (Department of Revenue), whereby the time limit was extended for passing the orders under Section 73 of the CGST Act. The petitioner has also prayed for quashing and setting aside of the order dated 27.12.2023 issued by the respondent No.7 under the provisions of the CGST Act. It is submitted by learned counsel for the petitioner that with the insertion of sub-section (5) in Section 16 of the CGST Act by way of the Finance Act, 2024, the grievance of the petitioner regarding availment of input tax credit is more or less resolved. However, it is submitted that the impugned order in respect of certain other demands had been passed without providing any opportunity of hearing to the petitioner. Learned counsel for the petitioner, therefore, submits that if this Court deems it appropriate then the matter may be remitted back to the authority concerned for deciding the claim of the petitioner afresh after providing an opportunity of hearing
Page No.# 3/3 to it in accordance with the provisions of the CGST Act. Learned counsel appearing for the respondents has also submitted that he is already in receipt of instructions from the Department and that the matter may be remitted back to the authority concerned for deciding the issue afresh in accordance with the provisions of the CGST Act, including the new amendment introduced in Section 16(5) of the CGST Act.
In view of the above submissions made by the learned counsel appearing for the parties, the impugned order dated 27.12.2023 passed by the respondent No.7 is set aside. The matter is remitted to the respondent No.7 to decide the matter afresh in accordance with the provisions of Section 16 of the CGST Act, as amended, after providing an opportunity of hearing to the petitioner, within a period of 2(two) months from the date of production of a certified copy of this order. With the above observation and direction, the writ petition stands disposed of.
JUDGE CHIEF JUSTICE Comparing Assistant
Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.