G. Venugopal Reddy vs. Union Of INDIA

WP/4357/2023HC TelanganaGSTCNR HBHC01007594202323 February 2023Bench: N.TUKARAMJI,UJJAL BHUYAN6 pages

For Petitioner: SRl. VENKATRAM REDDY MANTURFor Respondent: MS. B. SAPNA REDDY

AI SummaryRemanded

Facts

The petitioner, C. Venugopal Reddy, proprietor of M/s. Sri Renuka Manpower Suppliers, filed a writ petition challenging an Order-in-Original (OIO) dated March 3, 2022, passed by the Additional Commissioner, Ranga Reddy GST Commissionerate. The OIO confirmed a demand under Section 73(Q) of the Finance Act, 1994, read with Section 174 of the Central Goods and Services Tax Act, 2017, and also levied interest and penalty. The petitioner contended that no show cause notice was issued, and he was not afforded a personal hearing. The respondent submitted that a show cause notice was issued via email and speed post. However, the Court noted that the OIO did not record service of the show cause notice and that letters for personal hearing were returned undelivered, indicating a violation of natural justice.

Held

The Court held that the impugned Order-in-Original dated March 3, 2022, passed by the Additional Commissioner, was in violation of the principles of natural justice. The Court found no record in the OIO confirming the service of the show cause notice on the petitioner. Furthermore, personal hearing letters sent to the petitioner's last known address were returned undelivered, leading the Court to conclude that the notice was not served and the petitioner was not afforded a proper hearing. The Court invoked its jurisdiction under Article 226 of the Constitution of India, notwithstanding the availability of an alternative remedy, due to the violation of natural justice. The OIO was set aside. However, the Court directed that the set-aside OIO be treated as a show cause notice. The petitioner was given three weeks to file a reply, after which the respondent was to pass a fresh order within four weeks, providing the petitioner with an opportunity of hearing. If the petitioner failed to file a reply, the respondent could pass an order as deemed fit.

Key Issues

1. Whether the Order-in-Original dated March 3, 2022, passed by the Additional Commissioner is illegal, arbitrary, barred by limitation, without jurisdiction, and in violation of the principles of natural justice, particularly concerning the issuance and service of a show cause notice and the opportunity for a personal hearing, as contemplated under Section 73(Q) of the Finance Act, 1994, read with Section 174 of the Central Goods and Services Tax Act, 2017? Petitioner's Arguments: The petitioner argued that no show cause notice was issued prior to the impugned order, and he was not afforded any personal hearing, thus violating the principles of natural justice. Respondent's Arguments: The respondent (2nd Respondent) contended that a show cause notice was issued to the petitioner via email and speed post. They also stated that personal hearing letters were sent to the petitioner's last known address but were returned undelivered.

Sections Cited

Section 73(Q), Section 174

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

[ 3311 I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY THIRD DAY OF FEBRUARY TWO THOUSAND AND TWENTY THREE PRESENT THE HON9URABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO:4357 OF 2023 Between: C. venugopat Reddy, aged 48 years, Pr.op.4etgr- of. M/s. Sri Renuka. Manpower Supprierf 'piot tto ig-tZg, RTC, Street'No.22, HMT, Swarnapuri, Mivapur, Hyderabad - 500049 Telangana. ...'ET,T'ONER AND --'-J. Union of lndia, Rep. by its Secretary to Govemment, Ministry of Finance, New Delhi. - 110001 2. The Addl. Commissioner, Ranga Reddy GST Commissionerate, Posnett Bhavan. Tilak Road, Ram Kote, Hyderabad - 500 001. ...RES'ONDENTS Petition under Anide 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate Writ, order or direction, especially one in the nature of Writ of Mandamus declaring the Order passed by the 2nd Respondent in Order- ln- Original No.73t2021-22-Ad1n.(ADC)'ST' dated 03.03.2022, as illegal, arbitrary, barred by limitation, without jurisdiction and is in violation of Principles of Natural Justice, set aside the order-ln-original as null and void since the order is passed in the individual name instead of Sri Renuka Manpower Suppliers' IA NO: I OF 2023 Petition undersection 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to grant stay of all further proceedings pursuant to the lmpugned order-ln-original No.73l 2o21-22-Adjn.(ADC)-ST,datedO3/03/2022otlhe2ndRespondentservedon 12.c,3.2022, pendlng disposal of thc above Wrlt Petltlon, as otherwise the Petitioner will be put to severe loss and hardahip. Counsel for the Petitioner: SRl. VENKATRAM REDDY MANTUR Counsel for the Respondent No.l: SRI GADI PRAVEEN KUMAR' DEPUTY SOLICITOR GENERAL OF INDIA Counsel for the Respondent No.2: MS. B. SAPNA REDDY

The Court made the following: ORDER

THE HON'BLE THE CHIEFJUSTICE UJJAL BHUYAN AND THE HON'BLE SRI JUSTICE N.'TUKARAMJI W.P.No.4357 of 2023 ORDER,4'er the Hon'ble rhe Chief Jatia lJjjal Bbuyan) Heard Mr. Venkatram ltcddy.M, learned counsel for the petitioner and Ms. B.Sapna Reddv, learncd counsel for respondent No.2

By filing this petition undcr Article 226 of the Constitution of India, petitioner seeks quashing of the order-in-original dated 03.03.2022 passed by respondent No.2. 3. By wav of the impugncd orclcr-in-original datecl 03.03.2022, respondent No.2 has confirmcd the demand under Section 73Q) of the Finance Act, 1994 read rvith Scction 't74 of the Centra[ Goods and Services Tax Act, 2017 besidcs confirming levy of interest and additionally imposing penalry

In the proceeclings held on 16.02.2023, the tbltowing order was passed: Challengc rnade in this rvrit petition is to the order-in-<rrigirral dated 03.03.2022 passed by I I

..,'.. ..tl.. re ondent No.2 confirming demand and interest under the l;inance Acr, 1994 and thereafter imposing penalry. On a qucry by the Court as to rvhy petitioner has not preferred appeal and has filed writ petition, learned counsel for the petitioner submits that no shorv causc noticc was issued prior to the order-in- original dated 03.03.2022. In flact from a perusal of the impugned order, nowhere it is evident that show cause notice was issued ro the petitioner; petitioner was also not affcrrded any personal hearing. Ms. Sapna Reddy, learned counsel for respondent No.2 to obtain instructions. List this mamer on 23.02.2023 under rhe same caption. Today, learned counsel for respondent No.2 submits that as per the instructions received, show cause notice dated 29.12.2020 was issucd tc-r thc pcridoncr by c-mail as well as by speed posr. 6. on a perusal of the order-in-original dated 03.03.2022, we find that there is no finding recorded by respondent No.2 that the show cause notice issued to the petitioner was served upon rhe Issuance of show cause notice would be a mere pefluoner.

3 I t formalify unless serwice of thc same is rccorded in the order-in- ordinal. That ap^rt, in paragraph l l <-rf thc ordcr-in-original, we find that respondent No.2 had issued personal hearing letters dated 02.1.2.2021,,1,7.1.2.2021, and 13.01 .2022 to thc Pctitioner in the last known address but those wcre returned undelivered. In such circumstances, we can safely conclude that notice was not Sefiied upon the petitioner and thus, thcre is violation o[ the principles of natural justice. I[ there is violauon of the principles of natural fustice, a writ court would invokc its iuri iction under A15.cle 226 of the Constitution oI India norwithstanding availability of alternative remedy.

In view of the discussions made above, impugned order-in- original dated 03.03.2022 passed by respondent No.2 is hereby set aside. g. Though we have scr aside the order-in-original dated 03.03.2022, the same shall now be construed to be the show cause notice by the petitioner. Since petitioner is fully aware of the said notice, he shall submit repty theretc,r within three weeks from \ I

4: today urhereafrer respondent No.2 shall pass a fresh order in accordance with law after giving due opportuniry of hearing to rhe petitioner within a period o[ four weeks from the date of receipt of reply from the petitioner. However, we make it clear that if the petitioner fails to submit reply, it would be open to respondent No.2 to pass such order as may be deemed fit and proper. 9. \X/rit Petition is accordingly allowed. No costs. As a sequel, miscellaneous petitions, pending if any, stand closed. ,," OFFICER \ I To,.TheSecretarytoGovernment,MinistryofFinance,Unionoflndia,NewDelhi. " ; iti'ffi, ffi;;,;n tu+fu*mmld;*;,:;:,, ", ? 3H3313 3 ?,}3 33 3"''"' CHR BS g6h

HIGH COURT. DATED:23102l,2023 ORDER W.P.No.4357 o12023 A 't' e E ft 1 { s J * ). oo 1 B IIAB 2[23 Di'c p.a.1..'.'- i, ALLOWING THE WRIT PETITION V\,ITHOUT COSTS 0 u'tlul*

Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.