Heavy Steel Industry vs. Assistant Commissioner Of
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The petitioner, Heavy Steel Industry, a partnership firm, is challenging an adjudication order dated 18.08.2023 and a summary of order in Form GST DRC-07 dated 19.08.2023, issued by the Assistant Commissioner of Commercial Taxes for the tax period 2022-23. The petitioner contends that they had shifted their business premises from Hebbal, Mysore to Bannimantap, Mysore on 17.07.2023. However, the respondent issued notices and proceeded ex-parte to the petitioner's old address, resulting in the petitioner not receiving the notices and consequently being unable to participate in the proceedings. The petitioner argues that this violation of natural justice warrants quashing the impugned order and remitting the matter for fresh consideration.
Held
The Court allowed the writ petition, setting aside the impugned adjudication order dated 18.08.2023 (Annexure-D1). The Court reasoned that the impugned order was passed ex-parte because the petitioner did not receive the notices due to a change in address. The Court found merit in the petitioner's assertion that the failure to appear and contest the proceedings was due to bona fide reasons and unavoidable circumstances. Adopting a justice-oriented approach, the Court decided to set aside the order and remit the matter back to the respondent for reconsideration. The petitioner was directed to appear before the respondent on 12.08.2024, file objections and documents, and the respondent was directed to proceed from that stage, providing sufficient and reasonable opportunities. The Court also set aside bank attachments made as a consequence of the impugned order. The ratio decidendi is that where a party fails to participate in proceedings due to non-receipt of notices owing to a change of address, and provides a bona fide explanation, the principles of natural justice necessitate setting aside the ex-parte order and remanding the matter.
Key Issues
1. Whether the impugned adjudication order under Section 74(9) read with Section 6 and Section 50 of the Karnataka Goods and Service Tax Act/Central Goods and Service Tax Act, 2017, is liable to be quashed on the grounds of violation of natural justice due to non-receipt of notices by the petitioner? The petitioner argued that the respondent issued notices and passed the adjudication order to the petitioner's previous address, despite the petitioner having shifted their business premises. This failure to receive notices prevented the petitioner from participating in the proceedings and contesting the show cause notice, thereby violating principles of natural justice. The petitioner sought to have the order quashed and the matter remanded for fresh consideration. The respondent argued that the notices were issued to the petitioner's last known address and contended that the petition lacked merit and was liable for dismissal.
Sections Cited
Section 74(9), Section 6, Section 50
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER In this petition, petitioner is seeking for the following reliefs: a. issue a writ of certiorari or direction in the nature of writ of certiorari quashing the order of adjudication under section 74(9) read with Section 6 read with Section 50 of the Karnataka Goods and Service Tax Act/Central Goods and Service Tax Act, 2017 dated 18/08/2023 for the tax period 2022-23 issued by the Respondent in File No. ACCT, LGSTO-190/Adj- /2023-24 which is enclosed as Annexure D1. b. Issue a writ of certiorari or direction in the nature of writ of certiorari quashing the summary of the order issued in Form GST DRC-07 dated 19/08/2023 bearing reference no. ZD2908230286253 for the tax NC: 2024:KHC:30085 period 2022-23 issued by the Respondent which is enclosed as Annexure D2. c. And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity.
Heard learned Counsel for the petitioner and learned AGA for the respondent and perused the material on record.
In addition to reiterating various contentions urged in the petition and referring to the material on record, the learned counsel for the petitioner submits that initially the petitioner was carrying on business at premises bearing No. 301 Ground floor, Main road, Hebbal, 1st Stage, Mysore-570 016 and subsequently, the place of business was shifted by the petitioner from the aforesaid place address to premise bearing No. 3207/5, 3rd Cross, BB MIU Road, Bannimantap A layout, Mysore - 570 015 from 17.07.2023. It is submitted that despite the petitioner having shifted the business from the aforesaid premises at Hebbal, Mysore to Bannimantap, Mysore, on 17.07.2023 itself, the respondent have initiated and issued the impugned notice culminating in the impugned order to the earlier address of the petitioner as a result of which, the petitioner did not receive the notices and could not contest or participate in the proceedings which have culminated in the impugned order passed against the petitioner, which is assailed in the present petition. It is submitted that the petitioner was not provided sufficient or reasonable NC: 2024:KHC:30085 opportunity to contest the proceedings for want of receiving notice issued by the respondent and consequently, the impugned order being violative of natural justice, the same deserves to be quashed and the matter remitted back to the respondent for reconsideration afresh in accordance with the law.
Per contra, learned AGA for respondent submits that the notice of the impugned proceedings was issued to the last known address of the petitioner and says there are no merits in the petitions and the same is liable to be dismissed.
A perusal of the material on record discloses that the respondent had passed the impugned order as a result of the ex-parte proceedings in which the petitioner did not contest and not submitted his reply to the show cause notice, nor participated in the proceedings an account of the change of address from Hebbal, Mysore to Bannimantap, Mysore. Under these circumstances, in the light of the specific assertion on the part of the petitioner that the inadvertent omission to appear before the respondent and contest the proceedings was due to bona fide reasons, unavoidable circumstances and sufficient cause, it is just and appropriate to adopt justice oriented approach and set aside the impugned order and remit the matter back to the respondent for reconsideration afresh in accordance with law by issuing certain directions. NC: 2024:KHC:30085 The result, I pass the following: ORDER
The writ petition is hereby allowed.
The impugned order at Annexure-D1, dated 18.08.2023 is hereby set aside.
The matter is remitted back to the respondent for reconsideration afresh, in accordance with law.
The petitioner is directed to appear before the respondent on 12.08.2024 without awaiting further notice from the respondent.
The petitioner is directed to file the objections, documents etc., to the show cause notice and the respondent is directed to proceed further from that stage and dispose of proceedings after providing sufficient and reasonable opportunities to the petitioner in accordance with law.
It is made clear that if he does not appear on 12.08.2024 and not files the objections along with the document on that day, the present order shall be NC: 2024:KHC:30085 stand automatically revoked without reference to the Bench.
It is needless to state that on account of the present order setting aside the impugned order, the bank attachments that have taken place to account of the petitioner bank during the pendency of this petition as per Annexure F dated 01.06.2024 is hereby set aside. (S.R.KRISHNA KUMAR) JUDGE BKN List No.: 1 Sl No.: 20 CT: BHK
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.