M/S. Vpr Mining. Infrastructure Private Limited vs. Additional Commissioner Of Central Tax

Held

The Court held that the impugned order dated July 31, 2023, was liable to be set aside solely on the ground of violation of the principles of natural justice and the departmental guidelines dated March 10, 2017. The Court found merit in the petitioner's contention that they were not granted three opportunities for personal hearing as required by the said guidelines. The reasoning was based on the petitioner's assertion that one notice was not effectively served and another was for different proceedings, which the department did not conclusively refute to the satisfaction of the Court. The ratio decidendi is that adherence to departmental guidelines, particularly those ensuring principles of natural justice like adequate personal hearing opportunities, is mandatory for valid adjudication. The Court quashed the impugned order and remitted the matter back to the respondent No. 1 for fresh adjudication. The petitioner was directed to appear on January 19, 2024, and submit their explanation, after which the authorities are to proceed in terms of the guidelines dated March 10, 2017. No fresh communication or notice for the petitioner's presence on January 19, 2024, is required.

Facts

The petitioner, M/s. VPR Mining Infrastructure Private Limited, filed a writ petition challenging an Order-in-Original dated July 31, 2023, issued by the Additional Commissioner of Central Tax. The petitioner argued that the order was passed in violation of principles of natural justice, as they were not given a fair opportunity to defend themselves. Specifically, they contended that the authorities failed to adhere to the guidelines issued by the Ministry of Finance, Department of Revenue, Central Board of Excise and Customs dated March 10, 2017, which mandate at least three opportunities for personal hearing before a final order is passed. The department, in its counter-affidavit, claimed three notices were issued for personal hearings. However, the petitioner disputed the effective service of one notice and argued that another notice pertained to different proceedings, thus not fulfilling the requirement of three hearings for the specific show cause proceedings.

Key Issues

1. Whether the impugned Order-in-Original No.281GST/2023-24-Adjn (ADC)-HYD-GST dated July 31, 2023, was passed in violation of the principles of natural justice, specifically concerning the opportunity for personal hearing as stipulated by the guidelines dated March 10, 2017? (Question of law and fact, turning on the interpretation and application of principles of natural justice and departmental guidelines). Petitioner's arguments: The petitioner contended that the authorities failed to provide at least three opportunities for personal hearing as mandated by clause 14.3 of the Circular dated March 10, 2017. They argued that one notice was not effectively served, and another notice was for different proceedings, meaning the requirement for three hearings in the relevant show cause proceedings was not met. Respondents' arguments: The respondents (Additional Commissioner of Central Tax and Additional Director General of GST Intelligence) submitted that three notices were issued to the petitioner for personal hearings on May 18, 2023, June 1, 2023, and June 27, 2023, thereby adhering to the procedural requirements.