M/S Shree Sai Nath Construction Company Thru. Its Proprietor Mr. Virendra Kumar Mishra vs. Union Of INDIA Thru. Its Secy. Ministry Of Finance Deptt. Of Revenue New Delhi And Ors.

Held

The Court held that while the petitioner claimed a violation of natural justice due to the absence of a specific date, time, and place for personal hearing in the notice under Section 73, it was undisputed that the petitioner had not filed any reply to either the notice under Section 61 or the notice under Section 73. The Court observed that a businessman's normal reaction to a show cause notice is to submit a reply and request a personal hearing, or seek an extension if unable to reply in time. Since the petitioner chose to ignore the show cause notices and did not avail the opportunity of hearing, the Court found no reason to interfere in the procedure followed by the respondents in its writ jurisdiction. The Court directed the petitioner to avail the statutory remedy of appeal under Section 107 of the GST Act.

Facts

The petitioner, M/s Shree Sai Nath Construction Company, filed a writ petition challenging an order dated 18.04.2024 passed by the Deputy Commissioner, State GST, Raebareli. The petitioner contended that show cause notices dated 30.11.2023 and 23.01.2024 were issued in violation of Section 75(4) of the GST Act, 2017, as no opportunity for personal hearing was provided, with 'NA' mentioned in the relevant column. The respondent revenue stated that the petitioner received Rs.388.80 lacs as per Form 26AS but declared significantly less tax payable. Initially, a notice under Section 61 was issued, to which the petitioner did not reply. Subsequently, a notice under Section 73 was issued regarding discrepancies in turnover, and the petitioner again failed to file a reply or seek an adjournment. Based on this non-response, the Deputy Commissioner imposed GST liability of Rs.68,53,320/-, interest of Rs.66,81,987/-, and penalty of Rs.6,85,332/-.

Key Issues

1. Whether the impugned order dated 18.04.2024 is liable to be quashed for violation of the principles of natural justice, specifically the failure to provide a personal hearing as mandated by Section 75(4) of the GST Act, 2017? Petitioner's Arguments: The petitioner argued that the notices issued under Section 73 of the GST Act, 2017, were defective as they did not provide a specific date, time, and place for personal hearing, instead mentioning 'NA' (not applicable). This failure to grant an opportunity of hearing vitiated the subsequent order, rendering it perverse. Respondent's Arguments: The respondent revenue, through instructions from the Deputy Commissioner, stated that the petitioner had not filed any reply to the notice under Section 61, nor to the notice under Section 73. The respondent also highlighted that the petitioner had the statutory remedy of appeal under Section 107 of the GST Act. The respondent did not dispute the petitioner's claim regarding the absence of a specific hearing date but emphasized the petitioner's failure to respond to the notices.