M/S. Vishnu Trading vs. The Additional Commissioner Of CGST And Central Excise

Held

The Court held that the impugned order was liable to be quashed due to a violation of the principles of natural justice, as the petitioner was not granted a further opportunity after missing the personal hearing due to illness. The Court found that the petitioner's plea for reconsideration of the penalty and interest was valid, especially concerning the amount of Rs.8,68,184/-, where the tax component had already been paid by the petitioner, and it was not recovered from the recipient. Regarding the Rs.1,17,31,328/-, the Court noted that the petitioner was entitled to Input Tax Credit (ITC) and had reconciled and filed revised GSTR-3B returns after the audit. The Court reasoned that when the Act provides for rectification and filing subsequent returns, the respondents are bound to consider these benefits. Declining these benefits and imposing interest and penalty for the same sum was considered harsh. Consequently, the impugned order was quashed, and the matter was remitted back to the authorities for re-working based on the reconciled and revised GST 3B returns.

Facts

The petitioner, M/s.Vishnu Trading, a dealer in steaming coal, filed a writ petition challenging a show cause notice dated 10.11.2022 issued by the 2nd respondent and a consequential order dated 31.01.2023 passed by the 1st respondent. The petitioner had undergone an audit for the period 2017-2018, 2018-2019, and 2019-2020. While the petitioner accepted and paid discrepancies noted in paragraphs 3 to 5 of the audit report, they contested issues related to Rs.8,68,184/- and Rs.1,17,31,328/-. The petitioner missed a personal hearing due to illness and believed another opportunity would be granted, but the impugned order was passed. The petitioner contended that the impugned order violated principles of natural justice.

Key Issues

1. Whether the impugned order, passed without granting a further opportunity after the petitioner missed the personal hearing due to illness, violates the principles of natural justice, making the writ petition maintainable despite an alternative remedy? Petitioner's arguments: The petitioner argued that the failure to grant a further opportunity after they sought an adjournment due to illness constitutes a violation of natural justice. Therefore, a writ petition under Article 226 is maintainable, and the plea of alternative remedy by the respondents should fail. Revenue's arguments: The respondents' plea of alternative remedy was implicitly raised by the fact that a writ petition was filed, and the respondents would have argued for its dismissal on that ground. The judgment does not explicitly record separate arguments from the respondents regarding the violation of natural justice or the maintainability of the writ petition beyond the general assertion of an alternative remedy.