Tk Elevator INDIA Private Limited (Earlier Known As Thyssenkrupp Elevator (INDIA) Private Limited) vs. Assistant Commissioner (GST)

Held

The Court held that the impugned order dated June 21, 2021, was vitiated for two primary reasons. Firstly, it was an unreasoned order as it did not discuss or refer to the notice dated November 5, 2020, issued under Section 61 of the CGST Act, nor did it address the petitioner's reply to that notice. Secondly, the order was passed in violation of the principles of natural justice because the petitioner's request for a personal hearing was rejected, and no opportunity to be heard was afforded before the final decision was taken. The respondent's counsel fairly conceded to these points. Consequently, the Court set aside the impugned order and remanded the matter to the Proper Officer to pass a fresh speaking order after providing the petitioner with an opportunity of being heard. The ratio decidendi is that an order passed without considering the reply to a notice and without affording a personal hearing, especially when requested, violates principles of natural justice and renders the order unsustainable.

Facts

The petitioner, TK Elevator India Private Limited, is challenging an order dated June 21, 2021, which raised a demand of ₹93,839,317.24. The proceedings began with a search of the petitioner's premises on October 16, 2020, concerning dues for the period July 2017 to October 2020. Subsequently, a notice dated November 5, 2020, under Section 61 of the CGST Act read with Rule 99(1) of the CGST Rules, was issued highlighting discrepancies. The petitioner replied on December 5, 2020, and requested a personal hearing if the proceedings were not dropped. This request was denied, and the impugned order was passed under Section 74 of the CGST Act.

Key Issues

1. Whether the impugned order dated June 21, 2021, passed under Section 74 of the CGST Act, is vitiated for being unreasoned and lacking discussion of the petitioner's reply to the notice dated November 5, 2020, issued under Section 61 of the CGST Act read with Rule 99(1) of the CGST Rules? 2. Whether the impugned order is vitiated for being passed without adhering to the principles of natural justice, specifically by denying the petitioner an opportunity for a personal hearing? The petitioner argued that the impugned order was unreasoned as it failed to address the notice issued under Section 61 and the petitioner's detailed response. Furthermore, the petitioner contended that the denial of a personal hearing violated the principles of natural justice. The respondent, represented by the Assistant Commissioner (GST), conceded that the impugned order could be set aside and the matter remanded for a fresh decision after providing an opportunity of hearing to the petitioner.