M/S Ultimax Business Solutions PVT LTD And Anr vs. State Of West Bengal And Anr
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The appellants, M/s. Ultimax Business Solutions Private Limited & anr., filed a writ petition challenging an order passed by the revenue authorities. The writ petition was dismissed by the learned Single Judge, directing the appellants to avail the alternate remedy under the West Bengal Goods and Services Tax Act (WBGST Act). The appellants are now before the High Court in an intra-Court appeal. The core grievance is that the appellants were denied an adequate opportunity to present their submissions. This is evidenced by a series of fact sheets and show cause notices issued by the authority, followed by the appellants' replies and requests for time extensions, which were allegedly neither accepted nor rejected. The authority proceeded to pass a final order dated 23.05.2022 without addressing these requests or providing a clear personal hearing date.
Held
The Court held that the opportunity granted to an assessee to present their submissions must be effective and not illusory. The Court found that the procedural history, including the unaddressed requests for time extensions and the lack of a clear personal hearing date, demonstrated that the appellants were denied an adequate opportunity to put forth their submissions. Consequently, the Court allowed the appeal, set aside the order passed in the writ petition, and remanded the matter back to the original authority. The order passed under Section 74(9) of the WBGST Act was to be treated as a show cause notice. The appellants were directed to submit a detailed reply within 15 days, covering all aspects of the allegations in both the original and modified show cause notices, and were permitted to raise jurisdictional issues. The authority was then directed to fix a date for personal hearing and pass an order on merits within 15 days of the conclusion of the hearing. The Court also noted that if the appellants could reconcile transactions, due opportunity would be granted for that purpose.
Key Issues
1. Whether the appellants were afforded an effective and adequate opportunity to put forth their submissions before the revenue authority, as required under the principles of natural justice and the WBGST Act? Petitioner/Appellant's Arguments: The appellants contended that they were denied an effective and adequate opportunity to present their case. They highlighted that their requests for time extensions to reconcile discrepancies between fact sheets and show cause notices were not addressed. They also pointed out the absence of a specific date for personal hearing in the show cause notice. The appellants argued that the opportunity to be heard was illusory, not substantive. Revenue/State's Arguments: The judgment does not record any specific arguments made by the respondents (State of West Bengal & ors.).
Sections Cited
Section 74, Section 74(1), Section 74(9)
AI-generated summary — verify with the full judgment below
Item no. 03 IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURI ICTION
APPELLATE SIDE Present: The Hon’ble Justice T.S. Sivagnanam And The Hon’ble Justice Hiranmay Bhattacharyya FMA 1086 of 2022 with IA No. CAN 1 of 2022
M/s. Ultimax Business Solutions Private Limited & anr. vs. State of West Bengal & ors. Appearance: For the Appellants : Mr. Nilotpal Chowdhury Mr. Deepak Sharma For the Respondents : Mr. A. Ray, Ld. G.P. Mr. T.M. Siddiqui, AGP Mr. D. Ghosh Mr. N. Chatterjee Heard on : 13.03.2023 Judgment on : 13.03.2023. T.S. Sivagnanam J.: This intra-Court appeal filed by the writ petitioners is directed against the order dated 7th July, 2022 passed by the learned Single Judge in WPA 11836/2022. The writ petition was dismissed on the ground that the appellants should avail the alternate remedy provided for under the provisions of West Bengal Goods and Services Tax Act (for short “WBGST Act”) and the writ petition cannot be entertained. Aggrieved by the same, the appellants have filed the present appeal.
We have heard learned counsel for the parties. The prima facie grievance which the appellants have focused in the writ petition is that the appellants were not given adequate opportunity to put forth their submissions. It is not in dispute that after the enquiry, which was conducted in the business premises of the appellants on 13th January, 2021, the appellants had submitted various records on 28th January, 2021. Thereafter, the authority had issued a fact sheet dated 23rd December, 2021 for which the appellants had given a reply on 29th December, 2021. This was followed by a fact sheet dated 19th January, 2022 for which the appellants had given a reply on 25 th January, 2022. Show cause notice was issued under Section 74 of the WBGST Act stating that the appellants should submit their reply not later than 7th March, 2022. In the annexure to the show cause notice, no date has been assigned for grant of personal hearing. This was followed by a fact sheet under Section 74(1) of the WBGST Act dated 18th February, 2022. On 5th May, 2022 the appellants requested for 45 days time to submit their reply. The said request was neither accepted nor rejected. However, on 21.04.2022 a modified show cause notice under Section 74(1) of WBGST Act was issued. On receipt of the modified 2
show cause notice the appellant sent a representation dated 5th May, 2022 stating that the revised fact sheet sent by the department is not matching with the show cause notice issued because of difference in the amount and they are trying to reconcile the same and requested for grant of extension of time. However, this request was neither considered nor rejected and the authority proceeded to pass final order dated 23.05.2022. The above facts have been stated out to demonstrate that the appellants had been denied an effective and adequate opportunity to put forth their submission. It is not as if that the appellants had not cooperated with the department as at the first instance they had submitted a bunch of documents along with the letter dated 28th January, 2021. In the aforesaid facts and circumstances, this Court is of the view that opportunity to be granted to an assessee to put forth their submission should be an effective opportunity and should not be illusory. For such reasons, we are inclined to remand the matter back to the original authority for fresh consideration. In the result, the appeal is allowed and the final order passed in the writ petition is set aside and there will be a direction on the appellants to treat the order passed under Section 74(9) of the WBGST Act as a show cause notice and submit a detailed reply covering all aspects including the allegations in the first show cause notice as well as in the modified show cause notice. The appellants are also at liberty to raise juri ictional issue as it is the contention of the appellants that the modified show cause notice 3
is not tenable in the eye of law. The appellants shall submit their reply along with requisite documents within 15 days from receipt of the server copy of the order. Thereafter the concerned authority shall fix a date for personal hearing of the appellants or the authorized representatives of the appellants and then proceed to pass an order on merits and in accordance with law. If the appellants are able to reconcile all the transactions due opportunity shall be granted by the concerned authority to the appellants to do so. The concerned authority shall pass a final order within a period of 15 days from the date on which the personal is concluded. Thus, for the above reasons, the instant appeal is allowed and the connected application is disposed of. (T. S. Sivagnanam, J.) (Hiranmay Bhattacharyya, J.) RP/Amitava (AR. CT.) 4
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.