Asia (Chennai) Engineering Company Private Limited vs. Assistant Commissioner (St) (Fac)

Facts

The petitioner, Asia (Chennai) Engineering Company Private Limited, filed two writ petitions challenging adjudication orders dated March 31, 2022, passed by the Assistant Commissioner (ST) (FAC). The first petition (W.P.(MD).No.13851 of 2022) pertains to the tax period July 2017 to March 2018, and the second (W.P.(MD).No.13870 of 2022) relates to the tax period April 2018 to May 2018. The petitioner's primary contention is that the impugned orders were passed in violation of the principles of natural justice, as a physical reply sent on January 7, 2022, which was received by the respondent on January 10, 2022, was not considered. The petitioner also argued that personal hearing notices were not sent to their registered portal. The department contended that all communications are to be made through the portal and that the petitioner failed to appear for scheduled personal hearings.

Held

The Court, without delving into the merits of the contested issues between the petitioner and the respondents, found that the petitioner had indeed sent a detailed representation dated January 7, 2022, which was received by the respondents on January 10, 2022. This fact was not disputed by the Department. The Department's sole objection was that the postal/physical reply was not considered because it was not sent through the portal. The Court held that the petitioner deserved a personal hearing to present their objections and for the documents to be considered. The Court noted that the case involved an erroneous refund. Therefore, it was deemed appropriate to grant a personal hearing and consider the documents before the Department proceeds further. The Court directed the second respondent (to whom the file was transferred) to fix a personal hearing date, allow the petitioner to present their objections and documents, and then proceed with the show cause notices issued earlier for the respective tax periods. The entire process was to be completed within three months from the date of receipt of the order.

Key Issues

1. Whether the adjudication orders passed by the first respondent are liable to be quashed for violating the principles of natural justice, specifically concerning the non-consideration of the petitioner's physical reply and the alleged non-receipt of personal hearing notices through the portal, as contemplated under Section 75(4) of the Central Goods and Services Tax Act, 2017? Petitioner's Arguments: The petitioner argued that their physical reply dated January 7, 2022, which was received by the respondent on January 10, 2022, was not considered. They contended that Section 75(4) of the CGST Act mandates a personal hearing when an adverse decision is contemplated or a written request is received. They also claimed that personal hearing notices were not sent to their registered portal. The petitioner relied on a previous order of the High Court in W.P.No.13652 of 2020, which emphasized the necessity of personal hearing. Revenue's Arguments: The respondents argued that all communications are to be made through the GST portal. They stated that the petitioner's written reply was sent beyond the stipulated thirty days and by postal means, not through the portal. The respondents asserted that personal hearing notices were issued electronically through the portal and email, and the petitioner failed to appear on the scheduled dates (February 17, 2022, and March 16, 2022). They relied on Section 169 of the CGST Act regarding the modes of service of notice.