M/S Apex Packing Solutions vs. Deputy Commissioner

Facts

The petitioner, M/s Apex Packing Solutions, challenged an order dated 11.02.2025 passed by the Dy. Commissioner, State Goods & Services Tax (respondent no. 1) under Section 73 of the CGST/UKGST Act. This order demanded tax of Rs. 1,08,812/-, interest of Rs. 85,536, and penalty of Rs. 20,000, totaling Rs. 2,14,348/-. The petitioner also challenged the subsequent appellate order dated 13.10.2025, which dismissed their appeal as time-barred. The petitioner's grievance stemmed from a show cause notice issued on 07.10.2024, which granted them time to reply by 07.11.2024, but fixed the personal hearing date for 23.10.2024, prior to the reply submission deadline. The petitioner also contended that the show cause notice was not physically served but only uploaded on the GST portal, and they were unaware of its contents.

Held

The Court held that the procedure adopted by the respondent authority in fixing the date of personal hearing prior to the date fixed for submission of the reply to the show cause notice was illegal and in breach of the principles of natural justice. The Court found that the petitioner's contention regarding the premature fixation of the personal hearing date was valid. The Court also noted that the Revenue's counsel did not dispute this fact. Consequently, the Court quashed both the order of assessment passed under Section 73 and the subsequent appellate order. The matter was remitted back to the Assessing Officer to proceed from the stage of the show cause notice. The Assessing Officer was directed to grant the petitioner an opportunity to file its reply and thereafter fix a fresh date for personal hearing. The ratio decidendi is that a personal hearing must be afforded after the assessee has had a reasonable opportunity to respond to the show cause notice, and fixing the hearing before the reply date violates natural justice.

Key Issues

1. Whether the procedure adopted by the respondent authority in fixing the date of personal hearing prior to the date fixed for submission of the reply to the show cause notice was illegal and in breach of the principles of natural justice, as contemplated under Section 75 of the CGST/UKGST Act? Petitioner's arguments: The petitioner argued that the date of personal hearing could not legally be fixed before the date granted for submitting a reply to the show cause notice. They contended that this procedural irregularity rendered the personal hearing ineffective and violated the principles of natural justice. Furthermore, the petitioner argued that the show cause notice was not properly served, as it was only uploaded on the GST portal, and they had no knowledge of its contents. They relied on a judgment of a Coordinate Bench in Writ Petition (M/B) No. 123 of 2025, M/s Modine Thermal Systems Private Limited v. State of Uttarakhand and others, which held that the approach adopted by the Authority was contrary to the scheme of the Act and that statutory procedures must be followed strictly. Revenue's arguments: The learned counsel for the Revenue was not in a position to dispute that the date for personal hearing was fixed prior to the date of submission of the reply, and therefore, the personal hearing afforded was not effective and resulted in a breach of the principles of natural justice.