M/S R.K. Tanners vs. Union Of INDIA And 2 Others

Held

The Court held that the impugned order was passed in gross violation of the principles of natural justice. While the petitioner was issued show cause notices and indicated that a representative could appear, the petitioner consistently sought adjournments due to their counsel's unavailability. Crucially, on the second occasion, the petitioner requested a date after 10.02.2024, and this communication was received by the authority. However, no order was passed either granting or declining this request. The Court found it significant that the authority did not advert to this prayer, even in the impugned order, and proceeded to pass the order after a considerable delay. The Court reasoned that once a prayer for adjournment was made, it was incumbent upon the authority to either grant it or decline and communicate the decision. The Court also noted substance in the submission regarding the non-consideration of pleas raised in response to the show cause notice, likely due to the lack of a proper hearing. The Court found the plea of alternative remedy to be unsustainable due to the violation of natural justice. Consequently, the writ petition was allowed, the impugned order was quashed, and the matter was remanded for a fresh hearing.

Facts

The petitioner, M/s R.K. Tanners, is challenging an order dated 18.06.2024 passed by the Deputy Commissioner, SIB-D, Commercial Tax/State GST, Kanpur. This order imposed penalties and fines totaling Rs. 12,75,021.54 each for SGST and CGST, in lieu of confiscation of goods. The petitioner contends that the order violates principles of natural justice. Initially, a notice dated 01.01.2024 was issued for a hearing on 08.01.2024. The petitioner filed a reply on 03.01.2024 and requested a personal hearing with an advocate, indicating availability only after the first week of February 2024 due to the advocate's health. A second show cause notice was issued on 01.02.2024, requiring appearance on 06.02.2024. The petitioner again requested a date after 10.02.2024, citing the advocate's return from treatment. No response was received regarding this request, and the impugned order was passed on 18.06.2024.

Key Issues

1. Whether the impugned order dated 18.06.2024, passed by the Deputy Commissioner, SIB-D, Commercial Tax/State GST, Kanpur, is in gross violation of the principles of natural justice due to the failure to grant an effective opportunity of personal hearing to the petitioner, as contemplated under Section 130 of the Goods and Services Tax Act, 2017? Petitioner's arguments: The petitioner argued that despite filing exhaustive replies and specifically requesting a personal hearing after 10.02.2024 due to their counsel's unavailability, their prayer was neither declined nor communicated. The authority failed to pass any order on this request and proceeded to pass the impugned order after a significant delay of over four and a half months, without considering the petitioner's pleas or granting the requested hearing. They relied on the case of Shubham Steel Traders v. State of U.P. & others. Respondent's arguments: The respondents contended that the petitioner was issued show cause notices twice and repeatedly sought adjournments, thus it cannot be said that an opportunity of personal hearing was not offered. They also argued that the impugned order is appealable, and therefore, the writ petition should be dismissed on the ground of alternative remedy.