Shaikh Sons And Co And Anr vs. Union Of INDIA And Ors.

Held

The Court found that the petitioners did not contest the show cause notice, leading to the adjudication order. While acknowledging that the petitioners' explanation for non-compliance was not entirely appropriate, the Court noted that the appellate tribunal, the usual remedy, was not constituted. This denial of remedy necessitated an examination of the adjudication order on its merits. To ascertain the correctness of the order and address factual questions, the Court permitted the petitioners to file an appeal before the appellate authority under Section 107 of the said Act. The Court directed the petitioners to pay Rs. 3,00,000/- as pre-deposit within 10 working days of receiving the order. Upon payment and filing of the appeal, the appellate authority was directed to hear and dispose of the appeal on merits expeditiously, preferably within 8 weeks. Consequently, the respondent no. 4 was directed to recall the attachment order issued in Form GST DRC – 13 dated July 24, 2024.

Facts

The petitioners, Shaikh Sons & Co. & Anr., filed a writ petition challenging an order passed under Section 79(1)(c) of the WBGST/CGST Act, 2017, dated July 24, 2024, which was an order of attachment. They claimed to be unaware of an earlier adjudication order passed under Section 73 of the said Act on December 18, 2023, for the tax period July 2017 to March 2018. The petitioners stated that petitioner no. 2 is differently-abled and unable to travel without assistance. They also contended that the show cause notice was uploaded in an obscure section of the portal, leading to their non-representation and an ex parte determination. The revenue argued that the petitioners failed to respond to the show cause notice or appear before the proper officer, and did not challenge the adjudication order despite its upload on the portal.

Key Issues

1. Whether the adjudication order dated December 18, 2023, passed under Section 73 of the WBGST/CGST Act, 2017, is liable to be set aside on the grounds of the petitioners' alleged lack of awareness and inability to access the show cause notice, thereby violating principles of natural justice? (Mixed question of law and fact, turning on Sections 73 and 79 of the said Act). Petitioner's arguments: The petitioners argued that they were unaware of the adjudication order due to the show cause notice being uploaded in the "additional notices and orders" section of the portal, and that petitioner no. 2's disability prevented proper access. They contended that this lack of awareness prevented them from filing an appeal, and the attachment order would adversely affect their livelihood. They sought a stay on the attachment order. Revenue's arguments: The revenue argued that the petitioners failed to respond to the show cause notice or appear before the proper officer, leading to the ex parte adjudication order. They asserted that the adjudication order was duly uploaded on the portal and there was no valid explanation for the petitioners' failure to challenge it in time. They contended that no interference was called for.