Tirupati Traders And Anr. vs. The Union Of INDIA And Ors.

Held

The Court held that it was appropriate to direct the proper officer to consider and dispose of the petitioners' application for rectification within four weeks. Regarding the recovery of dues, the Court noted that the petitioners claimed that an amount exceeding 20% of the tax in dispute had already been recovered. Therefore, the Court directed that no further sum should be recovered from the petitioners on the strength of the impugned order dated December 12, 2023, until the rectification application remained pending, provided the CGST authorities were satisfied that an amount in excess of 20% of the tax in dispute had indeed been recovered. The Court explicitly stated that it had not adjudicated on the merits of the case, leaving all points open for decision by the proper officer. The petitioners were also granted leave to file an additional representation before the proper officer within a week.

Facts

The petitioners, Tirupati Traders & Anr., filed a writ petition challenging an order in original dated December 12, 2023, passed by the adjudicating authority under Section 73 of the WBGST Act, 2017/CGST Act, 2017. The petitioners contended that the order was passed in violation of natural justice, as their reply to the show-cause notice was not considered, and they were not granted a personal hearing. They also argued that the order was based on a wrong provision of law and that their application for rectification of this order was pending. Despite the pending rectification application, the CGST authorities proceeded to recover amounts from the petitioners' electronic credit ledger. The CGST authorities argued that the writ petition was not maintainable due to the availability of an appeal remedy and the delay in filing the petition, stating that the pendency of a rectification application did not justify the belated approach.

Key Issues

1. Whether the order in original dated December 12, 2023, passed under Section 73 of the WBGST Act, 2017/CGST Act, 2017, was passed in gross violation of the principles of natural justice, specifically concerning the non-consideration of the petitioners' reply to the show-cause notice and the denial of a personal hearing? 2. Whether the adjudicating authority erred in applying the wrong provision of law in passing the order in original, and if so, does the pendency of a rectification application filed by the petitioners justify the High Court's intervention before its disposal? Petitioner's arguments: The petitioners argued that the principles of natural justice were violated by the non-consideration of their reply and the lack of a personal hearing. They also contended that the order was based on an incorrect legal provision and that the CGST authorities should not have proceeded with recovery while their rectification application was pending. Revenue's arguments: The CGST authorities argued that the writ petition was not maintainable because the petitioners had an alternative remedy of appeal and that the petition was filed with undue delay. They further submitted that the pendency of a rectification application was not a valid ground for approaching the High Court belatedly.