Haripa INDIA And Anr vs. The Assistant Commissioner Of State Tax Lyons Range And N.D. Sarani Charge Wbgst
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The appellants, Haripa India & Anr., are aggrieved by an interim order passed by a learned Single Bench of the Calcutta High Court on September 5, 2024. This order directed the appellants to furnish a bank guarantee for the entire tax component as determined in an adjudication order dated April 29, 2024. The appellants had challenged this adjudication order in a writ petition. They contended that they had promptly responded to show-cause notices and submitted supporting documents. However, the adjudicating authority allegedly rejected their reply with a single line, deeming it unsatisfactory, and confirmed the demand made in the show-cause notice.
Held
The Court held that the adjudicating authority, as the first level of appeal, is obligated to consider the assessee's reply and provide specific reasons for deeming it unsatisfactory. The absence of such reasoning in the adjudication order dated April 29, 2024, was found to be a significant deficiency. Consequently, the Court decided that this defect alone was sufficient to set aside the order and remand the proceedings. The Court allowed the appeal, set aside the interim order of the writ petition, and allowed the writ petition. The adjudication order dated April 29, 2024, passed under Section 73 of the WBGST Act, 2017, was set aside and remanded to the adjudicating authority for fresh consideration. The adjudicating authority is directed to provide an opportunity for a personal hearing, consider oral submissions, the reply to show-cause notices, and all documents, and pass a speaking order on merits. The appellants are permitted to present all supporting decisions.
Key Issues
1. Whether the adjudicating authority, in passing the adjudication order dated April 29, 2024, failed to consider the reply submitted by the appellants and record adequate reasons for its rejection, thereby violating principles of natural justice? The appellants argued that the adjudicating authority's order was flawed because it summarily rejected their detailed reply without proper consideration or reasoned justification, relying on various Supreme Court and High Court decisions. They contended that the authority's single-line rejection was insufficient. The revenue/State's arguments are not recorded in the judgment.
Sections Cited
Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT (Judgment of the Court was delivered by T.S. SIVAGNANAM, C.J.)
The appellants/petitioners are aggrieved by the order passed by the learned Single Bench dated September 5, 2024 in W.P.A. 18230 of 2024 while granting an interim order and directing the appellants to secure the entire tax component as made under the adjudication order dated April 29, 2024
2 2 by furnishing a bank guarantee to the satisfaction of the learned Registrar General of this Court.
The appellants would contend that the chain of events will clearly show that the appellants had been promptly responding to all the show-cause notices and has submitted the documents in support of their claim. They also relied upon various decisions of the Hon’ble Supreme Court as well as this Court. However, the adjudicating authority, without considering the reply given by the assessee, by a single line, has rejected the reply as not satisfactory and confirmed the demand made in the show-cause notice in Form GST DRC-01.This order has been put to challenge in the writ petition.
In our view, the adjudicating authority, which is the first authority in the hierarchy of authorities, is bound to consider the reply and record reasons as to why the reply is not satisfactory. This is manifestly absent in the adjudication order dated April 29, 2024. This would be sufficient to set aside the order and remand the entire proceedings back to the adjudicating authority/assessing officer.
For the above reasons, this appeal is allowed. The interim order passed in the writ petition is set aside and the writ petition is allowed and the adjudication order dated April 29, 2024 passed under section 73 of the WBGST Act, 2017 is set aside and the matter is remanded to the adjudicating authority for fresh consideration.
The adjudicating authority shall afford an opportunity of personal hearing to the authorised representative of the assessee, take into consideration the oral submissions, the reply to the show-cause notices and all the 3 3 documents and pass a speaking order on merits and in accordance with law.
The appellants are at liberty to place all the decisions in support of their contentions, which shall be dealt with by the adjudicating authority.
No costs.
Urgent photostat certified copy of this order, if applied for, be furnished to the parties expeditiously upon compliance of all legal formalities. (T.S. SIVAGNANAM) CHIEF JUSTICE I agree. (BIVAS PATTANAYAK, J.) Pallab/KS AR(Ct.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.