Iprocess Business Solutions PVT LTD. vs. Union Of INDIA

Facts

The petitioner, lProcess Business Solutions Pvt Ltd., filed a writ petition challenging an Order-in-Original (O-I-O) dated December 13, 2023, issued by the Assistant Commissioner of Central Tax (GST), and a preceding show cause notice dated December 30, 2020. The petitioner contended that their reply to the show cause notice, filed on January 27, 2021, was not considered in the O-I-O, despite being duly received by the department. The respondents, represented by the Assistant Commissioner and other GST authorities, admitted that the reply was received but claimed it was not considered as it was deemed irrelevant by the authority. The dispute pertains to the financial year 2015-2016.

Held

The Court held that the impugned Order-in-Original dated December 13, 2023, is vulnerable and liable to be set aside. The Court reasoned that once a reply is received by the respondent-authority, there is a duty to consider it. The O-I-O's assertion that no reply was received was contradicted by the admission of the revenue's counsel that the reply was indeed received. The Court found that the O-I-O could not be justified on the ground of irrelevance without providing reasons for such a finding. Since the reply was admittedly received and not considered, the O-I-O was set aside. The matter was restored to the file of the Assessing Officer, who was directed to consider the petitioner's reply and provide a personal hearing before passing a fresh order in accordance with law. The Court explicitly stated that no opinion was expressed on the merits of the case.

Key Issues

1. Whether the impugned Order-in-Original dated December 13, 2023, is illegal and in violation of principles of natural justice for failing to consider the petitioner's reply dated January 27, 2021, to the show cause notice dated December 30, 2020? (Question of law and fact, concerning principles of natural justice and procedural fairness). Petitioner's contention: The petitioner argued that the O-I-O is vitiated because their reply, which was received by the department, was not considered. They asserted that failure to consider a submitted reply violates principles of natural justice. Revenue's contention: The revenue, through the Senior Standing Counsel, admitted that the reply was received but argued that it was not considered because the authority believed it to be irrelevant. They did not rely on any specific provision, circular, or precedent to support the non-consideration of a received reply.