M/S. Devanshi Plyboard Ind. P. LTD. vs. Dy. Com. Of State Tax, GST, Bureau Of Investigation (S. Bengal), Bi-Iv And Ors.

Held

The Court held that if an adverse report containing conclusions against the appellant was relied upon by the appellate authority, such material should have been furnished to the appellant to enable them to present their contentions and relevant facts. The Court found that the appellant's representation dated 19.07.2022 was not considered, and the copy of the adverse report was not furnished. Consequently, the Court decided to grant the appellant one more opportunity to present their case. This opportunity is conditional upon the appellant depositing a sum of Rs. 15 lacs within six weeks from the receipt of the order. Upon compliance, the appellate authority is directed to furnish a copy of the adverse report. The appellant will then submit a further representation, including an additional ground, which the appellate authority must consider on merits, uninfluenced by previous observations. The appellant is also directed to cooperate and not seek further adjournments. The Court noted that as the GST Tribunal had not been constituted, the writ petition was the first judicial forum to test the correctness of the appellate authority's order.

Facts

The appellant, M/s. Devanshi Plyboard Industries Private Limited, filed a writ petition challenging an order passed by the Senior Joint Commissioner, North Bengal, who was the appellate authority. The writ petition was dismissed by the learned writ court, leading to this intra-Court appeal. The appellant contended that an adverse report, relied upon by the appellate authority, was not furnished to them despite a representation, and that they were not granted an effective opportunity of hearing. The State argued that the appeal was heard over three days, and a speaking order was passed after sufficient opportunity. The total disputed tax (CGST and SGST) amounted to Rs. 50 lacs, as per the summary of an order dated 13.09.2019. The appellant had deposited 10% of the disputed tax at the time of filing the appeal.

Key Issues

1. Whether the appellate authority erred in relying on an adverse report without furnishing a copy to the appellant, thereby violating principles of natural justice, under Section 29 of the West Bengal Goods and Services Tax Act, 2017 (or equivalent CGST Act provisions)? 2. Whether the appellate authority provided an effective opportunity of hearing to the appellant, as mandated by procedural fairness under GST laws? Contentions of the Appellant: The appellant argued that the appellate authority's order was vitiated by a failure to provide them with a copy of the adverse report, which formed the basis of the decision. They also contended that the hearing granted was not effective, thus denying them a proper chance to present their case. They relied on the principle that adverse materials must be disclosed to the affected party. Contentions of the Respondent (State): The State contended that the appeal was heard on multiple dates, and the appellant was given sufficient opportunity to present their arguments. They asserted that the appellate authority passed a speaking order based on the available material.