M/S. Lotus Construction Corporation vs. Additional Commissioner Of Central Tax

WP/7460/2024HC TelanganaGSTCNR HBHC01014051202421 March 2024Bench: P.SAM KOSHY,N.TUKARAMJI7 pages

For Petitioner: SRI K.SUDHAKAR REODYFor Respondent: SRI DOMINIC FERNANDES, (Sr.standing counsel for CBIC), co u n s e I f o r th e Res po n d e n ts No' 3', Sxi 6x3, ""T#^1tExift, [T

AI SummaryAllowed

Facts

The petitioner, M/s. Lotus Construction Corporation, filed a writ petition challenging an order-in-original dated December 26, 2023, passed by the Additional Commissioner of Central Tax. The order pertains to tax periods from 2017-18 to 2019-20. The petitioner contended that the impugned order was passed in violation of the principles of natural justice because they were not effectively served with a notice for personal hearing. Specifically, the show cause notice dated November 22, 2023, indicated a hearing date of November 6, 2023, which was prior to its issuance. Even assuming a typographical error and the date was December 6, 2023, the notice dated November 27, 2023, was dispatched on December 5, 2023, and received by the petitioner on December 21-22, 2023, which was after the presumed hearing date. Upon approaching the authorities after receiving the notice, the petitioner was informed that the order had already been passed.

Held

The Court held that the impugned order dated December 26, 2023, passed by the Additional Commissioner of Central Tax, is not sustainable and deserves to be set aside. The Court found that the petitioner had sufficiently proved that the notice of personal hearing dated November 27, 2023, was not effectively served upon them well before the date of personal hearing. This failure contravenes the requirements of Section 75(a) of the CGST Act, 2017, and Circular No. 1053/02/2017 (para 14.3). The Court interfered with the order on these technical grounds, treating the impugned order itself as a show cause notice. The petitioner was directed to appear before the respondent No. 1 on April 15, 2024, without the need for a fresh notice. The authorities were directed to proceed thereafter and pass appropriate orders strictly in accordance with the law. No issue was expressly left undecided.

Key Issues

1. Whether the impugned order dated December 26, 2023, passed by the Additional Commissioner of Central Tax, is illegal and arbitrary for violating the principles of natural justice, specifically concerning the effective service of the notice for personal hearing, as contemplated under Section 75(a) of the CGST Act, 2017? Petitioner's Arguments: The petitioner argued that the notice for personal hearing was not effectively served before the impugned order was passed. They highlighted a discrepancy in the show cause notice where the hearing date (November 6, 2023) preceded the notice issuance date (November 22, 2023). Even if this was a typographical error and the date was December 6, 2023, the notice dispatched on December 5, 2023, and received on December 21-22, 2023, meant the petitioner could not attend the hearing. This failure to provide a fair opportunity for a personal hearing violates principles of natural justice and Section 75(a) of the CGST Act, 2017, and is also contrary to Circular No. 1053/02/2017, para 14.3. Respondents' Arguments: The judgment does not record any specific arguments made by the respondents regarding the service of the notice or the violation of natural justice.

Sections Cited

Section 75(a), Section 107

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

[ 337e ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FIRST DAY OF MARCH TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 7460 OF 2024 Between: M/s. Lotus Construction Corporation, rep. by its Managing Partner, Mr. A.V.Rama Rao, 5112175, Mangapuram Colony, Moula Ali, Hyderabad-506 1 12 AND 1. 2. 3. 4. ...PET]TIONER Additional Commissioner of Central Tax, Ranga Reddy GST Commissionerate, Madhapur, Hyderabad-500081. Superintendent (Adjudication), Ranga Reddy GST Commissionerate, Madhapur, Hyderabad-500 081. Union of lndia, rep. by its Secretary, Ministry of Finance, Govemment of lndia, 3rd Floor, Jeevan Deep Building, Sansad Marg, New Delhi-1 10 001- State of Telangana, rep. by Principal Secretary to Government, Revenue (CT- ll) Department, Secretariat, Hyderabad. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit fi.led therewith, the High Court may be pleased to issue a Writ of Mandamus or any other appropriate writ or order or direction setting aside the impugned order passed by the 1st Respondent in O.R.No.49/23- 24-Adjn (ADC) GST, daled 26.12.2023 as illegal, arbitrary and in violation of principles of natural justice and in contrary of Section 75@) ot the CGST Act,2017 and consequently direct the 1st Respondent to re-adjudicate the liability for the tax period 2017-18 to 2019-20 after granting a proper opportunity of personal hearing. I lA NO: 1 OF 2024 Petition under section 151 cpc praying that in the circumstances stated in the affidavit filed in suppo( of the petition, the High court may be pleased to grant stay of recovery of the disputed demand pursuant to the impugned order dated 26.12.2023 issued by the 1st Respondent for the tax period 2017-18 to 2o1g-2o under the GGST Act, 201 7, pending disposal of the writ petition, as otherwise the Petitioner will be put to severe loss and hardship. Counsel for the Petitioner : SRI K.SUDHAKAR REODY Counsel for the Respondents No.1&2 : SRI DOMINIC FERNANDES, (Sr.standing counsel for CBIC) co u n s e I f o r th e Res po n d e n ts No' 3' Sxi 6x3,""T#^1tExift ,[T; Counsel for the Respondents No.4 : Gp FOR COMMERCIAL TAX

The Court made the following: ORDER I I I I i :

THE HONOI'RABLI SRI JUSTICE P.SAM KOSIIY AND THE HONOIIRABLE SRI WSTICE N.TI'I{ARAMJI WRIT PEfITION No.746O OF 2ol24 ORDER:(per Hon'ble Si Justice P.SAM KOSHY) Heard Mr. S.Vijay Adithya, Iearned counsel for the petitioner, Mr. Dominic Fernandes, Senior Standing Counsel for CBIC and Mr. Angothu Nehra, learned counsel representing Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India, appearing for respondent No.

Perused the material available on record.

The challenge in the present Writ Petition is to the order-in-original dated 26.12.2023 passed by respondent No.1. 3. Conscious of the fact that the impugned order is an appelable order, as there is statutory remedy of appeal under Section 1O7 of the Central Goods and Services Tax Act, 2Ol7 (for short, the Act) available to the petitioner, we are inclined to take up the present Writ Petition on the ground contended by tJle petitioner that the impugned order is per se violative of the principles of natural justice. According to the learned counsel for the petitioner, the I : I I

2 notice of personal hearing was never served upon the petitioner before the impugned order was passed. 4. karned counsel for the petitioner took the attention of this Court to the show cause notice dated, 22.1I.2023 (Annexure-P4) whereunder date of hearing seems to have been fixed on 06.1I.2023 i.e., a date much prior to the date of issuance of show cause notice. Even if that date could be a typographical error, we presume it to be 06.12.2023 instead of 06.1 L.2023, but the records and the pleadings in the Writ Petition show that the notice d,ated. 27.1I.2023 was in fact dispatched only on 05.12.2023 and the said document was received by the petitioner on 21.22.2023 which apparently would be a date much after 06.12.2023. If the date of personal hearing has to be accepted to be O6.L2.2O23 treating O6.L1.2O23 as a typographical error, thus the petitioner has not been given fair opportunity of personal hearing before the impugned order is passed.

Upon receipt of letter dated 2L.12.2O23, when the petitioner approached the respondents authorities, he was informed that the impugned order has already been passed on 26.12.2023. I I 3

From the aforesaid factual matrix of the case and the documents enclosed along with the Writ Petition, it is amply proved by the pelitioner that the notice of personal hearing dated 27.11.2023 has not been effectively served upon the petitioner well before the date of personal hearing. Therefore, the impugned order does not meet the requirement in terms of Circular No.1O53/02/2017, dated LO.O3.2OL7 (para No.14.3), in addition to Section 75(a) of the Act. 7 . For the aforesaid reasons, in the opinion of this Court, the impugned order dated 26.12.2023 passed by respondent No. 1 is not sustainable and the same deserves to be and is accordingly set aside. Since we are interfering with the impugned order on the technical grounds as it being violative of principles of natural justice, treating the impugned order itself as a show cause notice, the petitioner shall appear before respondent No.l on 15.04.2024. There shall be no further requirement of issuance of fresh notice for the appearance of the petitioner before respondent No.1 on L5.O4.2O24. The authorities concerned may proceed j I I I i

4 thereafter and pass appropriate orders strictly accordance with law. ln

Accordingly, the Writ petition stands allowed. No order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. //II C. PRAVEEN KUMAR ASS]STANT REGISIRAR \,v To, SECTION OFFICER The Additional Commissioner . of . Central Tax, Ranga Reddy GST Commissionerate, Madhapur, HvOeiaOaO-SCjdos I "^' G?'r#ii'fi|o['f3:.(i3833?:'n)' Ranga Reddv GSr commissionerare, I he Secretary, Union of lndia,Ministry of F.inancle, Government of lndia. 3rd Floor, Jeevan Deep Buitding_, Sansad ffirig, Nil"d"fni_t tO Oor The Principat Secrerarv ro Government, Si;i;-;?T;i;;gana, Revenue (CT_,) P"prltngn! lgcretaridt, HyderaoJo.-'' une cC ro SRt K.SUDHAKhRf,EDDy, Advocate. tOpUCl tr"ir!? to SRI DoMlNlc FERNANDEs'iJJiii.iI'ioins counser ror cBrc). One CC to SRt GADI pRA\ ir,i.Elillil;'i:ttr{i3gfttlHft ,+ri:#i8sy:dr";r::T::; Agfr "o copies. GJP 1 2 3 4. 5. 6. 7. 9

HIGH COURT DATED:21 10312024 ORDER WP.No.7460 of 2024 ALLOWING THE WRIT PETITION WTHOUT COSTS 04i 1HE- S14r+- '/ o?' 0 1 .,' r 2ll2t a) ,a- ) .* 0l C\W '-].--..-:./ @

Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.