Ms Maa Tara Constructions Through Its Authorized Representative Amit Kumar Choudhary vs. Union Of INDIA

Facts

The petitioner, M/s. Maa Tara Constructions, approached the High Court of Jharkhand at Ranchi aggrieved by the realization of a short payment of late fee amounting to Rs. 19,735/-. This short payment pertained to the delay in filing Form GSTR-3B for the periods 2017-18 and 2018-19. The petitioner contended that the recovery from their electronic credit ledger was made without a proper show-cause notice, thus violating the principles of natural justice. They argued that at least some form of notice should have been provided, referencing an email dated January 4th, 2022, which requested voluntary payment via Form GST DRC-03. The petitioner asserted that procedural requirements and natural justice principles were not followed, giving them cause for action under Article 226 of the Constitution of India.

Held

The Court considered the grievance of the petitioner and the submissions made by both parties. It noted that the short payment of late fee due to the delay in filing GSTR-3B returns was not disputed by the petitioner. Consequently, the Court found that the realization of the balance amount of Rs. 19,735/- from the electronic credit ledger did not suffer from any illegality. The Court concluded that this was not a fit case for exercising its discretionary writ jurisdiction. Therefore, the writ petition was disposed of without granting the relief sought by the petitioner. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the realization of short payment of late fee from the electronic credit ledger without a proper show-cause notice violates the principles of natural justice, thereby giving the petitioner a cause of action under Article 226 of the Constitution of India? Petitioner's Contention: The petitioner argued that the recovery from the electronic credit ledger was made without adhering to the principles of natural justice, as no proper show-cause notice was issued. They emphasized that even the e-mail communication required voluntary payment through Form GST DRC-03, indicating a procedural lapse. The petitioner relied on the principle of natural justice and Article 226 of the Constitution of India. Respondents' (GSTN) Contention: The GSTN, through its counter affidavit, stated that the late fee was paid due to delayed filing of GSTR Returns. The system identified a short payment of late fee, which was subsequently realized from the petitioner's electronic credit ledger. GSTN argued that this action was not illegal and that no proceedings under Section 73(1) or 74(1) of the JGST Act were necessary for such a short payment of late fee. They contended that since the short payment of late fee was not disputed, interference under writ jurisdiction was uncalled for.