M/S Pvr Inox Limited (Formely Known As M/S Inox Leisure Limited) vs. Union Of INDIA
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M/s PVR Inox Limited (formerly M/s Inox Leisure Limited) filed multiple writ petitions challenging orders passed under various sections of the Rajasthan Goods and Services Tax Act, 2017, and the Central Goods and Services Tax Act, 2017. The petitioner contended that the impugned orders violated principles of natural justice and mandatory provisions of Section 75(4) of the Acts. Specifically, the petitioner argued that despite replying to show cause notices and seeking a personal hearing, such an opportunity was not effectively granted. The petitioner claimed that notices uploaded by the respondents were not reflected on their GSTIN portal, leading to a violation of statutory provisions. The respondents acknowledged that notices were uploaded but admitted that technical glitches might have prevented them from appearing on the petitioner's GSTIN portal.
Held
The Court held that the impugned orders were liable to be set aside on the ground of violation of the petitioner's right to an opportunity of personal hearing, as mandated by Section 75(4) of the RGST Act, 2017/CGST Act, 2017. The Court noted that the petitioner had unequivocally requested a personal hearing after submitting its replies to the show cause notices. It was an undisputed factual position that while the respondents uploaded notices on their departmental portal, these notices did not reflect on the petitioner's GSTIN portal due to technical glitches. This failure to comply with the statutory mandate of providing an effective personal hearing, despite the petitioner's request, led to the violation of the principles of natural justice. Consequently, the Court set aside the impugned orders and remanded the matters back to the competent authority. The authority was directed to afford the petitioner an opportunity of personal hearing and pass fresh orders in accordance with law within two months. The Court clarified that it had not decided the matters on merits and the petitioner was free to raise all available grounds.
Key Issues
1. Whether the impugned orders passed under Sections 7, 9, 15, 50, and 73 of the RGST Act, 2017/CGST Act, 2017, are liable to be set aside for violating the principles of natural justice and the mandatory provisions of Section 75(4) of the respective Acts, which mandate an opportunity of personal hearing upon request? Petitioner's Arguments: The petitioner argued that the respondents failed to provide a proper personal hearing as mandated by Section 75(4). They contended that after submitting replies to show cause notices and explicitly requesting a personal hearing, the notices uploaded by the respondents did not reflect on the petitioner's GSTIN portal, thereby denying them a meaningful opportunity to be heard. This failure constitutes a violation of statutory provisions and principles of natural justice. Respondents' Arguments: The respondents conceded that notices were uploaded to provide an opportunity for personal hearing, consistent with Section 75(4). However, they attributed the non-reflection of these notices on the petitioner's GSTIN portal to technical glitches, suggesting it was not a deliberate act to deny the petitioner a hearing. They argued that this was a mere technical oversight.
Sections Cited
Section 7, Section 9, Section 15, Section 50, Section 73, Section 74, Section 75(4)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
Order REPORTABLE 19/07/2024
Heard.
Since these writ petitions raise identical issue of law for consideration of this Court, therefore, heard analogously and are being decided by this common order.
These writ petitions have been filed by the petitioner in the matter of proceedings drawn and orders passed under Section 7, 9, 15, 50 and 73 of the Rajasthan Good and Services Tax Act, 2017 (for short ‘the RGST Act of 2017’)/the Central Goods and Services Tax Act, 2017 (for short ‘the CGST Act of 2017’).
Learned counsel for the petitioner would firstly raise a common submission that irrespective of the merits of individual cases, impugned orders have not only violated the principles of natural justice but also mandatory provisions contained in Section 75(4) of the RGST Act of 2017/the CGST Act of 2017 which, in addition to providing an opportunity of hearing by issuance of show cause notice, also mandates the respondents to afford an opportunity of personal hearing once the assessee raises such a demand. According to the petitioner, after the show cause notice was issued, the petitioner submitted its reply and sought to contest the matters on merits without admitting the proposed demand. Petitioner also prayed for grant of opportunity of personal hearing. Referring to various pleadings as contained in the writ petitions as also in the additional affidavits, it is submitted
[2024:RJ-JP:30253-DB] (5 of 7) [CW-19799/2023] that even though Respondents No. 2 to 4 uploaded the notices on the common portal of the Department, the same were not reflected in GSTIN Portal of the petitioner, resulting in violation of statutory provisions.
Learned counsels appearing on behalf of the respondents would fairly submit that the Department had uploaded the notices requiring the petitioner to appear before the concerned authority towards affording the petitioner opportunity of personal hearing, consistent with the scheme of Section 75(4) of the RGST Act of 2017/the CGST Act of 2017, it appears that because of technical glitches, the same could not be reflected on the GSTIN Portal of the petitioner. Learned counsels for the respondents would submit that this is merely a technical glitch and cannot be said to be a deliberate action on the part of the respondents in denying opportunity of personal hearing to the petitioner.
We have heard learned counsel for the parties.
Section 75 of the RGST Act of 2017/the CGST Act of 2017 contains general provisions relating to determination of tax. Sub- section (2) thereof explicitly provides that where any Appellate Authority or Appellate Tribunal or Court concludes that the notice issued under sub-section (1) of Section 74 of that Act is not sustainable for the reason that the charges of fraud or any willful- misstatement or suppression of facts to evade tax has not been established against the person to whom the notice was issued, the proper officer shall determine the tax payable by such person, deeming as if the notice was issued under sub-section (1) of Section 73 of that Act. Further, Sub-section (4) of Section 75 of
[2024:RJ-JP:30253-DB] (6 of 7) [CW-19799/2023] RGST Act of 2017/the CGST Act of 2017 provides that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.
The aforesaid mandate of law requires that in a case where the person chargeable with tax or penalty seeks an opportunity of hearing, he/she shall be granted such an opportunity provided that such a request is received in writing.
The undisputed facts are that the petitioner, after receiving notices, submitted application in each case making a request for affording opportunity of personal hearing. This is clear from the material on record and goes as an undisputed factual position. Learned counsel for the respondents have admitted the fact that even though the respondents intended to grant opportunity of personal hearing to the petitioner and notices to that effect were also uploaded on the portal of the Department, the petitioner’s case is that the same were though uploaded on the portal of the Department, but were not reflected on the GSTIN Portal of the petitioner, which also goes as an undisputed factual position. This is clear from the additional affidavit filed by the petitioner and the response received pursuant to that query which is also annexed along with the additional affidavit filed by the petitioner. It is, therefore, apparent that the statutory mandate was not complied with and impugned orders were passed against the petitioner in respect of different assessment years.
[2024:RJ-JP:30253-DB] (7 of 7) [CW-19799/2023]
As petitioner’s right of opportunity of personal hearing in the manner as provided under the law has been violated, we are inclined to set aside the impugned orders on this ground alone.
Impugned order are, accordingly, set aside. The matters are remanded back to the competent authority for affording opportunity of personal hearing to the petitioner and passing appropriate orders in accordance with law. The respondents are directed to complete the proceedings in all the cases within a period of two months from today. The petitioner shall not seek any adjournment on the date fixed for its personal hearing. However, it is made clear that this Court has not decided these matters on merits and it will be open for the petitioner to raise all the grounds which are available to it under the law.
Writ petitions are, accordingly, allowed.
Office is directed to place a copy of this order on record of each writ petition. (ASHUTOSH KUMAR),J (MANINDRA MOHAN SHRIVASTAVA),CJ Manoj Narwani-Aarzoo/7, 229-232
Reproduced from the public record of the Rajasthan High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.