Mohammad Nur Hasan vs. State Of West Bengal And Ors.

Held

The Court held that the petitioner's grievance regarding the adjudication of 'tax short paid on outward supply' without it being raised in the show cause notice has merit. While the respondents argued about the delay in filing the writ petition, the Court found it necessary to address the procedural irregularity. The Court decided to interfere with the impugned order only to the extent of the issue of 'tax short paid on outward supply.' The Court directed the respondent authorities to grant a fresh hearing to the petitioner specifically on this issue. During this rehearing, the petitioner will be allowed to present documents and arguments. The Court also mandated that the entire process of rehearing on this specific issue be completed within four weeks from the date of communication of the order. The rest of the impugned order is to remain in force and be executed as per law.

Facts

The petitioner, Mohammad Nur Hasan, is challenging an order dated April 3, 2024, passed by the respondent authorities. The challenge stems from a show cause notice dated November 21, 2023, which raised two points: (a) excess Input Tax Credit (ITC) availed and (b) reversible ITC availed, with a total disputed amount of Rs. 5,01,258/- (Rs. 2,30,942/- and Rs. 2,70,316/- respectively). The petitioner submitted a reply to the show cause notice. However, the petitioner alleges that the impugned order adjudicated on a new point, 'tax short paid on outward supply,' which was not included in the original show cause notice, thereby creating a fresh case against him. The respondents, in their defense, argued that the writ petition was filed two years after the impugned order, causing prejudice due to the delay.

Key Issues

1. Whether the adjudication of 'tax short paid on outward supply' in the order dated April 3, 2024, is valid when this issue was not raised in the show cause notice dated November 21, 2023, thereby violating principles of natural justice? Petitioner's contention: The petitioner argued that the respondents made out a fresh case against him by adjudicating on the issue of 'tax short paid on outward supply,' which was not part of the original show cause notice. This, according to the petitioner, constitutes a violation of natural justice and renders the adjudication on this point invalid. Revenue/State's contention: The respondents contended that the writ petition was filed two years after the impugned order was passed. They argued that this significant delay has resulted in prejudice to the respondents, implying that the petition should be dismissed on grounds of laches.