Menlo Technologies INDIA Private Limited vs. Union Of INDIA And 2 Others

Facts

The petitioner, Menlo Technologies India Private Limited, challenged an Order-in-Original dated March 4, 2022, passed by Respondent No. 2, the Commissioner of Central Tax. The petitioner contended that the order was passed in violation of the principles of natural justice. Specifically, the petitioner highlighted that paragraph 5 of the impugned order stated the assessee had neither submitted a reply to the show cause notice nor attended the personal hearing, and that the intimation for personal hearing was returned undelivered. The petitioner argued that this constituted a failure to provide a proper opportunity for hearing. The respondents, represented by the learned counsel for Central Taxes, admitted that the records did not disclose proof of service of notice upon the petitioner.

Held

The Court held that, prima facie, the impugned order was passed without proper service of notice upon the petitioner, thus violating the principles of natural justice. The Court noted the respondents' admission that the records did not disclose proof of service. Consequently, the Court found it to be in the interest of justice to remand the matter back to the adjudicating authority (Respondent No. 2). The adjudicating authority was directed to afford a reasonable opportunity of hearing to the petitioner before passing a fresh order. The impugned order-in-original dated March 4, 2022, was set aside. The petitioner was granted three weeks from the date of the order to submit a reply to the show cause notice. If the reply was submitted within this period, the respondent was to pass a fresh order in accordance with the law, including providing an opportunity for a personal hearing. If no reply was filed, the respondent was at liberty to pass such order as deemed fit.

Key Issues

1. Whether the Order-in-Original dated March 4, 2022, passed by Respondent No. 2, is arbitrary and violative of the principles of natural justice, specifically the right to a fair hearing, as contemplated under the relevant provisions of the GST Act and Rules. Petitioner's arguments: The petitioner argued that the impugned order was passed without complying with the principles of natural justice. They contended that the personal hearing notice was returned undelivered, and therefore, the adjudication was based on insufficient grounds, leading to an arbitrary order. They relied on the principle that an order passed without affording a reasonable opportunity of hearing is void. Respondents' arguments: The respondents, through their counsel, conceded that the records did not disclose proof of service of notice upon the petitioner. They did not present any arguments to counter the petitioner's claim of violation of natural justice.