M/S.M. Siva Nanda Swamy Contractor vs. The State Of Telangana

WP/2358/2024HC TelanganaGSTCNR HBHC01004609202431 January 2024Bench: P.SAM KOSHY,N.TUKARAMJI7 pages

For Petitioner: SRI S. DWARAKANATH REPRESENTING FOR, SRI VENKATRAM REDDY MANTUR

AI SummaryRemanded

Facts

The petitioner, M/s. M. Siva Nanda Swamy Contractor, filed a writ petition challenging an order dated 30.12.2023 passed by the Assistant Commissioner (ST) for the tax period 2017-18. The petitioner contended that the order was illegal and arbitrary as it was not signed or digitally signed and that they were not afforded an opportunity of personal hearing, despite a written request. The petitioner also noted a significant increase in the tax liability from the show cause notice (Rs. 2,36,15,292/-) to the impugned order (Rs. 4,03,20,214/-), which they argued was contrary to Section 75(2) of the CGST Act. The respondents argued that electronically uploaded orders do not require manual signatures and that the petitioner's reply to the show cause notice was considered. They conceded that a personal hearing was not reflected in the order.

Held

The Court held that the impugned order dated 30.12.2023 is bad in law primarily on the ground that the petitioner was not afforded an opportunity of personal hearing, despite a written request. This failure violates the requirement of Section 75(1) of the CGST Act and the principles of natural justice. The Court explicitly stated that it was leaving open the issue of whether the order would be vitiated solely for not being signed, to be considered in other proceedings. Consequently, the impugned order was set aside and quashed. The matter was remitted back to the second respondent (Assistant Commissioner (ST)) for passing a fresh order after providing an opportunity of personal hearing to the petitioner. The petitioner was also granted liberty to raise objections regarding the increased tax liability, which the respondent must consider and deal with in a speaking order.

Key Issues

1. Whether the impugned order dated 30.12.2023, issued under Form GST DRC-07 for the tax period 2017-18, is legally unenforceable due to the absence of a manual or digital signature by the issuing authority, as per the petitioner's contention? 2. Whether the impugned order is bad in law for failing to provide the petitioner with an opportunity of personal hearing, in violation of the principles of natural justice and Section 75(1) of the CGST Act, as argued by the petitioner? 3. Whether the increase in tax liability from Rs. 2,36,15,292/- in the show cause notice to Rs. 4,03,20,214/- in the impugned order is contrary to Section 75(2) of the CGST Act, as contended by the petitioner? Contentions of the Petitioner: The impugned order is illegal as it lacks a signature and a personal hearing was denied, violating Section 75(1) of the CGST Act and principles of natural justice. The increase in tax liability is contrary to Section 75(2) of the CGST Act. They relied on Section 75(1) and Section 75(2) of the CGST Act. Contentions of the Respondents: Electronically uploaded orders do not require manual signatures. The petitioner's reply was considered. The respondents conceded that a personal hearing was not reflected in the order.

Sections Cited

Section 73, Section 75(1), Section 75(2)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

ll t 337e I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE THIRTY FIRST DAY OF JANUARY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION No:23 580F 2024 Between: M/s.M. Siva Nanda Swamy Contractor, HIG 34, APHB Colony, Jadcherla, Mahbubnagar District - 509301 , Rep., by its Proprietor. Mr. M. Shivananda Swami. ...PETITIONER AND 1 The State of Telangana, Department of Revenue (C.T) Rep. by it Principal Secretary, Secretariat, Hyderabad. Assistant commissioner (ST), Nagarkurnool at Jadcherla Circle, Jadcheda, Nalgonda Division. 3. Union of lndia, rep. by its Principal Secretary, Government of lndia, Ministry of Finance, 3'd Floor, J6evan Deep Building, Sansad Marg, New Delhi-l 10 001. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Couft may be pleased to issue a Writ of Mandamus or any other appropriate wril or order or direction declaring the impugned order in DRC-07 daled 30.'12.2023 passed for the tax period 2017-18 (O1-O7-2017 to 31-03-2018) and the summary of the order annexed to Form DRC-07 vide Ref.No. 2D36122307O546F dated 30-12.2023 issued by the 2nd Respondent as illegal, arbitrary, contrary to the provisions of the Act, without considering the objections filed by the petitioner, without affording an opportunity of personal hearing before passing the impugned order' and consequenfly set aside the impugned order alternatively to declare that the show c4use notice in DRC-O'! dated 30-09-2O23 and the impugned order in DRC-07 2 dated 30-12-2023. without there being the signature of the 2nd Respondent manually or with Digital Signature as legally unenforceable in the eye of law' IA NO: 10F 2024 PetitionunderSectionl5lCPCprayingthatinthecircumstancesstatedin the affidavit filed in support of the petition, the High court may be pleased to grant stay of all further proceedings pursuant to the impugned order passed by the 2'd Respondent dated 30.12.2023 for the tax period 2017-18 (O1-O7-2017 to 31-03- 2018),pendingdisposaloftheWritPetition,asotherwisethePetitionerwillbeput to severe loss and hardshiP. Counsel for the Petitioner: SRI S. DWARAKANATH REPRESENTING FOR SRI VENKATRAM REDDY MANTUR Counsel forthe Respondent No'1 and 2: SRI K' BHASKAR REDDY' AGP FOR COMMERCIAL TAX CounselfortheRespondentNo.3:MS'K'MANIDEEPIKAREPRESENTING FOR SRI GADI PRAVEEN KUMAR' DEPUW SOLICITOR GENERAL OF INDIA The Court made the following: ORDER ,/ 7 THE HON'BLE SRI JUSTICE P.SAIU KOSHY AND THE HON'BLE SRI JUSTICE N.TUKARAMJI W.P. No. 2358 of 2024 ORDER: per Eo n'bte Si Justice P.SAI,, I(OSH[/ Heard Mr.S.Dwarakanath, learned Senior Counsel appearing on behalf of Mr.M.Venkatram Reddy, learned counsel for the petitioner; Mr.K.Bhaskar Reddy, learned Assistant Government Pleader for Commercial Taxes appearing for respondent Nos. I and 2 and Ms.K.Mani Deepika, learned counsel appearing on behalf of Mr.Gadi Praveen Kumar, learned Deputy Solicitor General of India appearing for respondent No.3. Perused the entire record. 2. The challenge in the present writ petition is to the order dated 30.12.2023 passed under Form GST DRC-07 by respondent No.2, for the tax period 2017-18 (O1.O7.2017 to 31.03.2018). 3. Primarily, the challenge to the impugned order by the petitioner invoking the writ jurisdiction is two-fold. Firstly, the order is bad for the reason that it is not a signed docum-ent nor is it digitally signed by the oflicer concerned. Secondly, the impugned order is bad for the reason that the petitioner has not been afforded an opportunity of personal hearing before the impugned order was passed. 4. [rarned counsel for the petitioner has contended that a show cause notice was issued to the petitioner on 29.09.2023 :under Section 73 of the CGST Act, 2Ot7 (for short, 'the ActJ and to the said 2 show cause notice, the petitioner did file a detailed reply on 05.12.2023. Thereafter, straightway the impugned order has been passed on 30.12.2023. Learned counsel further submits that from the reading of the impugned order itself, it would be evidently clear that the petitioner was never given an opportunity of personal hearing. As regards the same, learned counsel referred to the provision of Section 75 $l of the Act, which mandates an opportuniry of hearing to be provided before assessment. Whereas, in the present case, the required opportunit5r of personal hearing has not been granted to the petitioner. Therefore, the impugned order amounts to violation of the principles of natural justice. Learned counsel further submits that even in reply to the show cause notice, they had specifically requested the authorities for providing an opportunity of personal hearing in spite of which, the personal hearing was not provided. 5. lrarned Assistant Government pleader appearing for respondent Nos. I and 2, however, submits that it is a case where the petitioner did appear and submit his reply to the show cause notice, to which, the authorities concerned have thereafter passed the impugned order taking into consideration the contents of the reply that the petitioner has furnished. Therefore, it cannot be said to be bad in law. As far as the impugned order being not signed is concerned, learned counsel submits that since as per the present system, the orders have be uploaded electronically, the documents need not be .sigeq4 or the signatures need not be reflected in the 3 II t I orders and these documents are issued with Digital Signature Certificate. Moreover, learned counsel submits that since the name and designation of the Officer was already reflected in the impugned order, only because it is not signed by the authorities concerned would not vitiate the said order. So far as the aspect of the petitioner being denied of the personal hearing, learned counsel submits that from the bare perusal of the impugned order passed and the time from which the petitioner had filed the reply, there does not seem to be any opportunit5z of personal hearing being provided or atleast is not

reflected in the order.

At this juncture, learned counsel for the petitioner also drew the attention to the show cause notice which was issued to the petitioner where the amount of tax liability was reflected at Rs.2,36,15 ,292 /-. However, when the impugned order of assessment was passed, the impugned amount assessed is Rs.4,03,20 ,214 I -. This according to the learned counsel is contrary to the provisions of Section ZS (Zl of the Act. 7 . Given the said submissions by the learned counsel for the parties, leaving open the issue whether the impugned order would get vitiated only on the ground of it not being signed to be considered in another appropriate proceedings, we are of the considered opinion that the impugned otder per se is bad for the reason that the petitioner h?s not been given an opportunity of personal hearing, in -.--

4 spite of the written request made by the petitioner which meets the requirement of law under Section ZS $l of the Act. The impugned order, therefore, on this very ground itself stands set aside/quashed and the matter stands remitted back to respondent No.2 for passing of a fresh order after giving an opportunity of personal hearing to the petitioner.

Since the matter is getting remanded back, the petitioner would be at liberty to appraise the authorities concerned/raise objections so far as the amount of tax liability in the impugned order as well. The respondent No.2 while passing a fresh order shall consider the same and also deal with by a Speaking Order.

The Writ Petition to the aforesaid extent stands allowed and the matter stands remitted back to the authorities concerned. Consequentiy, miscellaneous petitions pending, if any, shail stand closed. No order as to costs. . N. CHANORA SEKHAR RAO ASSISTANT REGISTRAR /ffRUE COPY// SECTION OFFICER The Principal Secretary, The State of Telangana, Department of Revenue Secretariat, Hyderabad. Assistant commissioner (ST), Nagarkurnool at Jadcherla Circle, Jadcherla, Nalgonda Division. The Principal Secretary, Union of lndia, Government of lndia, Ministry of Finance, 3rd Floor, Jeevan Deep Building, Sansad Marg, New Delhi-1 10 001. One CC to Sri Venkatram Reddy Mantur, Advocate IOPUCI Two CCs to GP for Commercial Tax, High Court for the State of Telangana, at Hyderabad [OUfl One CC to Sri Gadi Praveen Kumar, Deputy Solicitor General of lndia[OPUC] Two CD Copies To, 1. 2. 3. 4 5 6 7 TJ GJPs ;.-

HIGH COURT DATED:31 10112024 ORDER WP.No.2358 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS. t , t 2024 7 0 ( o 6 6 * c SPATCHg o * R o r€ 14. o (J IyII F 1HE S14 %t*

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.