Jayshree Jhunjhunwala vs. Union Of INDIA And 2 Ors.

Held

The Court held that there was no dispute that the petitioner's GST registration was cancelled effective 09.11.2022, and there was nothing on record to indicate its revival. Crucially, the respondents did not contend that any physical or offline notice was issued or served upon the petitioner before the impugned order was passed. Consequently, the Court found the petitioner's contention regarding the violation of natural justice to be justified and worthy of acceptance. The Court reasoned that since the petitioner was not provided with an opportunity to defend herself, the ex-parte order was not sustainable. The ratio decidendi is that an ex-parte order passed without affording the assessee an opportunity of being heard, especially when the assessee claims non-receipt of notice and the revenue cannot prove actual service, violates the principles of natural justice and is liable to be set aside. The Court set aside the impugned ex-parte order dated 22.12.2023 and directed the petitioner to submit her reply to the show cause notice within three weeks. The respondent No.3 was directed to pass a fresh order after affording the petitioner an opportunity to be heard, in accordance with law.

Facts

The petitioner, Smti. Jayshree Jhunjhunwala, was the proprietor of a firm, 'Hanumanbux Umadutt', registered under GST. The firm was sold in September 2021, and the petitioner's GST registration was cancelled effective 09.11.2022. The petitioner, an elderly individual, did not monitor the firm's GST portal after the sale. She became aware of a show cause notice dated 30.09.2023 and an ex-parte order dated 22.12.2023, issued by the Superintendent of Taxes, Circle-II, Meghalaya, demanding reversal of Input Tax Credit along with interest and penalty, only in April 2025 when a recovery officer contacted her son. The impugned order was passed under Section 73 of the Meghalaya Goods and Services Tax Act, 2022.

Key Issues

1. Whether the ex-parte order dated 22.12.2023, passed by the Superintendent of Taxes, Circle-II, Meghalaya, under Section 73 of the Meghalaya Goods and Services Tax Act, 2022, is sustainable in law, given that the petitioner claims no show cause notice was actually served upon her, either physically or in a manner ensuring actual knowledge, particularly after her GST registration was cancelled. Petitioner's Contention: The petitioner argued that the issuance of the show cause notice through e-mode without physical service, long after the cancellation of her registration, amounts to a violation of the principle of natural justice. She contended that she was unaware of the proceedings until April 2025. She relied on the Allahabad High Court's decision in Writ Tax No.-1989 of 2025 (2025:AHC:70367-DB). Respondents' Contention: The respondents contended, by referring to various provisions of the Meghalaya Goods and Services Tax Act, 2022, that the mere cancellation of registration does not absolve the petitioner from paying taxes, interest, and penalty for transactions carried out prior to the date of application for cancellation. Therefore, she cannot be exonerated from liabilities incurred before the effective date of cancellation.