Ms Madan Singh Kathyat Contractor vs. Commissioner State Goods And Services Tax Commissionerate

Facts

The petitioner, M/s Madan Singh Kathayat Contractor, challenged an order dated 27.08.2024 passed by the Commissioner, State Goods and Services Tax Commissionerate, Dehradun, under Section 73(9) of the CGST Act/UKGST Act. This order demanded tax of Rs. 9,58,343.12, along with a penalty of Rs. 95,834.30, totaling Rs. 10,54,177.42. The petitioner's grievance stemmed from a Show Cause Notice issued on 21.05.2024, which granted time to reply by 21.06.2024 but fixed the personal hearing for 05.06.2024, a date preceding the reply submission deadline. The petitioner also contended that the Show Cause Notice was not served physically but uploaded on the GST portal, and they were unaware of its contents.

Held

The Court held that the procedure adopted by the respondents, fixing the date of personal hearing prior to the date granted for submission of the reply to the Show Cause Notice, was illegal and in breach of the principles of natural justice. The Court noted that the Revenue's counsel could not dispute this fact. Consequently, the assessment order passed by the Assessing Officer could not be sustained. The Court quashed the impugned order and remitted the matter back to the Assessing Officer. The Assessing Officer was directed 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 address the issue of the mode of service of the Show Cause Notice, as the matter was decided on the procedural irregularity of the hearing date.

Key Issues

1. Whether the procedure adopted by the respondents, fixing the date of personal hearing before the deadline for submitting a reply to the Show Cause Notice, is illegal and in breach of the principles of natural justice, as per Section 73 and Section 75 of the CGST Act/UKGST Act? Petitioner's arguments: The petitioner argued that fixing the personal hearing before the due date for submitting the reply is procedurally illegal. They further contended that the Show Cause Notice was not served physically but only uploaded on the GST portal, of which they were not aware. They relied on a Coordinate Bench judgment in M/s Modine Thermal Systems Private Limited vs. State of Uttarakhand and others, which held that the date of personal hearing cannot precede the date fixed for submitting the reply to the Show Cause Notice, citing Sections 73, 74, and 75 of the Act. Revenue's arguments: The learned counsel for the Revenue could not dispute that the date for personal hearing was fixed prior to the date of submission of the reply, acknowledging that the personal hearing afforded was not effective and resulted in a breach of natural justice.