Subhash Sana vs. Deputy Commissioner

Facts

The petitioner, Subhash Sana, challenged an order dated 11.02.2025 passed by the Deputy Commissioner, State Goods and Services Tax, Rudrapur, under Section 73(9) of the CGST Act/UKGST Act. The order demanded tax, interest, and penalty totaling ₹3,29,206/- (Tax ₹1,73,120/-, Interest ₹1,36,086/-, Penalty ₹20,000/-). The petitioner's grievance stemmed from a Show Cause Notice issued on 14.10.2024, which granted a reply submission deadline of 11.11.2024 but fixed the personal hearing for the same date, 11.11.2024, at 3:33 p.m., which was before the reply submission deadline.

Held

The Court held that the procedure adopted by the respondent authority, fixing the date of personal hearing prior to the date fixed for submission of the reply to the Show Cause Notice, was illegal and a breach of the principles of natural justice. The Court noted that the learned counsel for the Revenue could not dispute this fact. Consequently, the order of assessment could not be sustained and was quashed. The matter was remitted back to the Assessing Officer to proceed from the stage of the Show Cause Notice, grant the petitioner an opportunity to file their reply, and thereafter fix a fresh date for personal hearing. The Court did not specifically address the second issue regarding Rule 142(1A) as the primary ground for quashing the order was the procedural irregularity in fixing the hearing date.

Key Issues

1. Whether the procedure adopted by the respondent authority, fixing the date of personal hearing prior to the date for submission of reply to the Show Cause Notice, is illegal and in contravention of the principles of natural justice, as per Section 73 and Section 75(4) and (5) of the CGST Act/UKGST Act? 2. Whether the issuance of Show Cause Notice along with the Summary Show Cause Notice without issuing a prior intimation contravenes Rule 142(1A) of the GST Rules, 2017? The petitioner argued that fixing the personal hearing before the deadline for submitting a reply renders the hearing ineffective and violates natural justice. They relied on the judgment in M/s Modine Thermal Systems Private Limited vs. State of Uttarakhand and others, which held that the statutory scheme requires adherence to a particular procedure. The petitioner also contended that Rule 142(1A) was violated by not issuing a prior intimation before issuing the summary Show Cause Notice. The Revenue, represented by the learned Standing Counsel, did not dispute that the personal hearing date being prior to the reply submission date resulted in a breach of natural justice.