Sun & Sand Industries Africa PVT. LTD vs. Sales Tax Officer Class-Ii/Avato Department Of Trade And Taxes

Facts

The Petitioner, Sun & Sand Industries Africa Pvt. Ltd., challenged an order dated 19.12.2023 passed by the Sales Tax Officer, which disposed of a Show Cause Notice (SCN) dated 23.09.2023 and raised a demand of Rs. 15,19,68,460.00/- including penalty against the petitioner. The SCN cited excess claim of Input Tax Credit (ITC), scrutiny of ITC availed, and under-declaration of ineligible ITC as reasons. The Petitioner had responded to the SCN on 23.10.2023, requesting more time for a detailed reply and a personal hearing. A reminder was issued on 12.12.2023, offering a final opportunity for personal hearing. The Petitioner replied to the reminder on 18.12.2023, again seeking time to file a reply and appear for the hearing. However, the impugned order dated 19.12.2023 was passed without considering these requests, deeming the demand ex-parte.

Held

The Court held that the impugned order dated 19.12.2023 was cryptic and did not adequately consider the Petitioner's requests for an opportunity to file a reply and appear for a personal hearing. While acknowledging that adjournments are not a right and are discretionary under Section 75(5) of the Act, the Court found that the Petitioner's prayer for one opportunity to file a reply warranted consideration. Consequently, the Court set aside the impugned order dated 19.12.2023 and remitted the Show Cause Notice to the proper officer for re-adjudication. The Petitioner was directed to file a reply within 30 days, after which the Proper Officer was to re-adjudicate, grant a personal hearing, and pass a fresh speaking order within the period prescribed under Section 75(3) of the Act. The Court clarified that it had not commented on the merits of either party's contentions.

Key Issues

1. Whether the impugned order dated 19.12.2023, passed under Section 73 of the Central Goods and Services Tax Act, 2017, is liable to be set aside for violating principles of natural justice by failing to grant the Petitioner adequate opportunity for personal hearing and filing a detailed reply, as contended by the Petitioner? Petitioner's Contention: The Petitioner argued that they had repeatedly sought time for a detailed reply and personal hearing, which were not adequately considered. They relied on Section 75(5) of the Act, which permits adjournments of personal hearings up to three times if sufficient cause is shown, asserting that their requests for time were not granted despite sufficient cause, thus violating natural justice. Respondent's Contention: The Respondent contended that the Petitioner failed to file a detailed reply and did not appear in person despite being granted two opportunities.