M/S.Thoppil Agencies vs. The Assistant Commissioner Of

Held

The Court held that the impugned order dated November 25, 2019, passed by the Assistant Commissioner of Commercial Taxes, is in clear contravention of the principles of natural justice. The Court noted that the impugned order relied upon several documents and circumstances that were neither referred to nor enumerated in the show cause notice. It was also not disputed that no personal hearing was given to the petitioner before passing the order. The material on record indicated that documents relied upon by the respondent were neither brought to the petitioner's notice nor was the petitioner allowed to cross-examine witnesses concerning these documents. Additionally, no opportunity was provided to the petitioner to produce additional documents. Consequently, the Court found that the absence of sufficient and reasonable opportunity rendered the order liable to be set aside on this ground alone. The matter was remitted back to the Assistant Commissioner for fresh disposal in accordance with law, with directions to provide sufficient opportunity to the petitioner, furnish copies of relied-upon documents, allow cross-examination of witnesses, permit production of additional documents, and consider the relevant circular. The proceedings were to be concluded within one month, and online contestation was permitted due to the COVID-19 pandemic.

Facts

The petitioner, M/s Thoppil Agencies, a dealer in arecanut, filed a writ petition challenging a penalty order dated November 25, 2019, passed by the Assistant Commissioner of Commercial Taxes (Enforcement-2), Hubballi, under Section 129(3) of the Central Goods and Services Tax Act, 2017. The order was issued in Form GST OV 09. The petitioner contended that the impugned order was passed in violation of the principles of natural justice. Specifically, the petitioner argued that the show cause notice issued on November 13, 2019, referred to only certain documents, and while the petitioner provided a reply, the respondent proceeded to pass the order relying on several other documents that were not previously disclosed to the petitioner. The petitioner also claimed that no personal hearing was afforded, nor was there sufficient opportunity to present their case or cross-examine witnesses.

Key Issues

1. Whether the impugned penalty order passed under Section 129(3) of the Central Goods and Services Tax Act, 2017, is liable to be quashed for violating the principles of natural justice? Petitioner's arguments: The petitioner argued that the impugned order is violative of the principles of natural justice. They contended that the show cause notice at Annexure-B4 only referred to specific documents, and their reply was submitted accordingly. However, the respondent passed the final order (Annexure-E) relying on several other documents that were never brought to the petitioner's notice. Furthermore, no personal hearing was granted, and no sufficient or reasonable opportunity was provided to the petitioner to present their case, produce additional documents, or cross-examine witnesses regarding the documents relied upon by the respondent. Therefore, the order is vitiated on this ground alone. Revenue's arguments: The learned AGA for the respondents supported the impugned order and contended that there is no merit in the petition. They argued that an alternative remedy by way of appeal is available to the petitioner, and therefore, the writ petition is liable to be dismissed.