M/S Ittefaq Steels And Scarp Traders vs. The Commercial Tax Officer

WP/21587/2023HC KarnatakaGSTCNR KAHC01050392202306 August 2024Bench: S.R.KRISHNA KUMAR6 pages

For Petitioner: SRI. RAJEEV CHANNAPPA NULVI., ADVOCATEFor Respondent: SRI. HEMA KUMAR, AGA

AI SummaryAllowed

Facts

The petitioner, M/s Ittefaq Steels and Scarp Traders, filed a writ petition challenging an order passed by the Commercial Tax Officer (Enforcement-3), Puttur (Respondent No.1) on 01.09.2023 in Form GST-MOV-09. The petitioner received a notice in Form GST-MOV-7 on 25.08.2023, requiring a response by 01.09.2023. The petitioner, through its Chartered Accountant, requested a three-day extension due to bonafide reasons and unavoidable circumstances. This request was denied by Respondent No.1, who proceeded to pass an ex parte order on the same day, citing the maximum seven-day period for passing an order from the date of notice service. The petitioner sought to quash this order and obtain an opportunity to present its case.

Held

The Court allowed the petition, setting aside the impugned order dated 01.09.2023 passed by Respondent No.1. The matter was remitted back to Respondent No.1 for reconsideration afresh in accordance with law. The Court adopted a justice-oriented approach, acknowledging the petitioner's assertion that it would file its response and contest the notice if given one more opportunity. The petitioner was directed to appear before Respondent No.1 on 28.08.2024 and submit its response/reply along with documents. Respondent No.1 was directed to consider these submissions, provide an opportunity to the petitioner, and proceed in accordance with law. The interim order dated 27.09.2023 was directed to continue in force until the disposal of the proceedings by Respondent No.1. The ratio decidendi is that a request for a short extension, when supported by bonafide reasons, should be considered to uphold principles of natural justice, and an ex parte order should not be passed without affording a reasonable opportunity to the assessee, especially when a request for a brief extension is made.

Key Issues

1. Whether the rejection of the petitioner's request for a three-day extension to file a response to the notice in Form GST-MOV-7, and the subsequent passing of an ex parte order in Form GST-MOV-09 by the Commercial Tax Officer (Enforcement-3) on 01.09.2023, was arbitrary and violative of the principles of natural justice, particularly in light of the petitioner's assertion of bonafide reasons and unavoidable circumstances. Petitioner's contentions: The petitioner argued that due to bonafide reasons and unavoidable circumstances, it could not submit its reply within the stipulated period. The rejection of its request for a short extension and the immediate passing of an ex parte order by Respondent No.1 amounted to a denial of an opportunity to be heard, thus violating principles of natural justice. Revenue's contentions: The learned Additional Government Advocate submitted that there was no merit in the petition and that it was liable to be dismissed.

Sections Cited

GST-MOV-7, GST-MOV-09

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

- 1 - NC: 2024:KHC:31270 WP No. 21587 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 21587 OF 2023 (T-RES) BETWEEN: M/S ITTEFAQ STEELS AND SCARP TRADERS A PROPRIETARY CONCERN NO.377, 10TH CROSS SIDDIQU NAGAR BANNIMANTAP, B LAYOUT MYSORE-570015 (GTIN-29A1NPA5377R1ZC) REPRESENTED BY MR S ABDUL RAHAMAN KHAN S/O LATE ADBUL SATTAR KHAN AGED ABOUT 57 YEARS …PETITIONER (BY SRI. RAJEEV CHANNAPPA NULVI., ADVOCATE) AND: 1. THE COMMERCIAL TAX OFFICER ENFORCEMENT-3 PUTTUR, DAKSHINA KANNADA DISTRICT KARNATAKA-574201 2. THE JOINT COMMISSIONER OF COMMERCIAL TAXES ENFORCEMENT WEST ZONE MANGALORE-575001 …RESPONDENTS (BY SRI. HEMA KUMAR, AGA) Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:31270 WP No. 21587 of 2023 THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER IN FORM GST-MOV-09 DATED 01/09/2023 VIDE ORDER NO. CTO(ENF-3)/PUT/NO.17/2023-24 PASSED BY THE R1 AUTHORITY (ANNEXURE-J). THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, the petitioner seeks the following reliefs:

"Issue a Writ of Certiorari or a direction in the nature of Writ of Certiorari quashing Order in Form GST- MOV-09 dated 01/09/2023 vide Order No.CTO(Enf- 3)/PUT/No.17/2023-24 passed by the Respondent No.1 authority (ANNEXURE-'J')"

Heard the learned counsel for the parties and perused the material on record.

A perusal of the material on record will indicate that though several contentions have been urged by both sides in support of their respective clams, it is an undisputed fact which is borne out from the material on record that on 25.08.2023, respondent No.1 - the Commissioner Tax Officer, (Enforcement - NC: 2024:KHC:31270

3), Puttur, issued notice in Form GST MOV-7 to the petitioner calling upon it to respond on or before 01.09.2023. On 01.09.2023, the petitioner addressed a Communication/Letter through its Chartered Accountant seeking extension of time by a period of three days for the purpose of submitting its response/reply to the notice in Form GST MOV-7. However, the said request of the petitioner was refused by respondent No.1 on the ground that the maximum period stipulated for the purpose of passing an order was seven days from the date of issuance of service of notice in Form GST MOV-7. 4. It is grievance of the petitioner that due to bonafide reasons, unavoidable circumstances and sufficient cause, the petitioner could not submit its reply/response along with documents to the notice in Form GST MOV-7, and since the request made through its Chartered Accountant for extension of time was rejected by respondent No.1 who proceeded to pass the impugned ex parte order, the petitioner is before this Court by way of the present petition seeking setting aside of the impugned order and for reconsideration of the matter afresh by providing an opportunity to the petitioner. NC: 2024:KHC:31270

Per contra, the learned Additional Government Advocate submits that there is no merit in the petition and the same is liable to be dismissed.

A perusal of the impugned order at Annexure-J dated 01.09.2023 in Form GST MOV-7 will indicate that respondent No.1 has proceeded to pass the impugned order on the basis that the petitioner had not submitted its reply to the notice in Form GST MOV-7 within a stipulated period of seven days, and since the said period expired on 01.09.2023, respondent No.1 was left with no option than to proceed to pass with the impugned order. However, in the light of the assertion on the part of the petitioner that if one more opportunity is provided, the petitioner would file its response/reply and contest the said notice in Form GST MOV-7, I deem it just and appropriate to adopt a justice oriented approach and set aside the impugned order and remit the matter back to respondent No.1 for reconsideration afresh in accordance with law by issuing certain directions in this regard. In the result, I proceed to pass the following: ORDER a The petition is allowed. NC: 2024:KHC:31270 b The impugned order dated 01.09.2023 passed by respondent No.1 - the Commercial Tax Officer (Enforcement - 3), Puttur [Annexure-J] is hereby set aside.

c The matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law.

d The petitioner shall appear before respondent No.1 on 28.08.2024 without awaiting further notice from respondent No.1. e On 28.08.2024, the petitioner shall submit its response/reply to the notice in Form GST MOV-7 along with the documents which shall be considered by respondent No.1, who shall provide an opportunity to the petitioner and proceed further in accordance with law.

f It is further directed that till the disposal of the proceedings by respondent No.1 pursuant to this order, the interim order dated 27.09.2023 NC: 2024:KHC:31270 passed by this Court shall continue to remain in force and operate within the parties. (S.R.KRISHNA KUMAR) JUDGE

Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.