M/S Ceat Limited, A Company Incorporated Under The Companies Act 1956/2013 vs. The Union Of INDIA

Held

The Court held that the impugned order dated February 23, 2021, passed by the Assistant Commissioner, State Taxes, Patna, was in clear infraction of Rule 100(2) of the Central Goods and Services Tax Rules, 2017, and also violated the principles of natural justice. The Court noted that the show-cause notice was issued on February 14, 2021, granting 15 days for a response, and the petitioner submitted their reply on February 24, 2021. However, the impugned order was passed on February 23, 2021, prior to the expiry of the statutory period and without considering the petitioner's written contentions. This failure to consider the petitioner's reply prejudiced their case, especially given the civil consequences of tax and penalty imposition. Consequently, the Court quashed and set aside the impugned order and the show-cause notice. The matter was remanded back to the Assessing Officer to decide afresh on merits after complying with the principles of natural justice, affording adequate opportunity for hearing, and considering the petitioner's reply. No coercive steps were to be taken against the petitioner during the pendency of the proceedings. The Court explicitly stated that no opinion was expressed on the merits of the case.

Facts

The petitioner, M/s CEAT Limited, challenged an order dated February 23, 2021, issued by the Assistant Commissioner, State Taxes, Patna. This order imposed a demand of Rs. 28,29,694, comprising Rs. 22,93,101 in CGST/GST/IGST and Rs. 5,36,583 as interest, for the year 2018-19. The petitioner contended that a show-cause notice was issued on February 14, 2021, granting 15 days for a response. While the petitioner filed a written reply on February 24, 2021, the impugned order was passed on February 23, 2021, prior to the expiry of the statutory period and before considering the petitioner's response. This, the petitioner argued, violated principles of natural justice and relevant rules.

Key Issues

1. Whether the impugned order dated February 23, 2021, passed by the Assistant Commissioner, State Taxes, Patna, is liable to be quashed for violation of the principles of natural justice and statutory rules, specifically Rule 100(2) of the Central Goods and Services Tax Rules, 2017? Petitioner's Arguments: The petitioner argued that the order was passed prematurely, before the expiry of the 15-day period stipulated in the show-cause notice issued under Rule 100(2) of the CGST Rules, 2017. They further contended that their written reply, submitted within the stipulated time, was not considered before the order was passed, thus violating the principles of natural justice. The imposition of tax and penalty entails civil consequences, making adherence to these principles crucial. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or the Union of India.