M/S.Kpd Contractors Represented By Its Managing Partner Palanisamy vs. The Joint Commissioner Of GST And Central Excise

Held

The Court decided to partly exercise its discretion in favour of the petitioner. It quashed the impugned order and remitted the case back to the respondents for passing fresh orders on merits and in accordance with law. The Court reasoned that despite the petitioner's failure to appear for the first personal hearing and alleged non-submission of documents, a significant amount of tax had already been paid by the petitioner. Specifically, Rs.2,61,87,750/- was paid through the Electronic Credit Ledger out of the total demand of Rs.4,44,30,586/-. The Court directed that the quashed order would be treated as an addendum to the show cause notice. The petitioner was granted 30 days to file a reply to the notices. Additionally, the petitioner was directed to pay 10% of the balance disputed tax from their Electronic Cash Register, as the previous payment was from the Electronic Credit Ledger. The first respondent was instructed to pass fresh orders expeditiously, preferably within three months. The Court noted that the petitioner's failure to cooperate could lead to further proceedings. The issue of whether the petitioner was indeed denied an opportunity to submit documents was implicitly addressed by allowing a fresh opportunity.

Facts

The petitioner, M/s.KPD Contractors, filed a writ petition challenging an Order in Original (OIO No.14/2023-GST dated 29.09.2023) issued by the Joint Commissioner of GST & Central Excise for the tax periods 2017-18 to 2020-21. The petitioner had received notices (GST DRC 01A and GST DRC 01) but failed to reply to them. While the petitioner did not appear for the first personal hearing, they appeared through an advocate for the second hearing. The petitioner claimed to be semi-literate, a road contractor, and unable to discharge tax liability due to exaggerated demands. They also alleged not being allowed to submit documents, violating principles of natural justice, and sought one opportunity to present their case. The respondents contended that the petitioner acknowledged receipt of the show cause notice and documents, and argued for dismissal due to latches and the inability to file a statutory appeal, citing Supreme Court decisions.

Key Issues

1. Whether the impugned order dated 29.09.2023, which confirmed demands for the tax periods 2017-18 to 2020-21, is liable to be quashed on grounds of violation of principles of natural justice, as argued by the petitioner? 2. Whether the petitioner, having failed to appear for the first personal hearing and not submitting documents, is disentitled to any relief, as contended by the respondents? Petitioner's Arguments: The petitioner argued that as a semi-literate road contractor, they failed to discharge tax liability due to exaggerated demands. They contended that they were not allowed to submit documents to substantiate their case, leading to a manifest violation of the principles of natural justice. They requested one opportunity to present their case. Respondents' Arguments: The respondents argued that the petitioner had clearly acknowledged receipt of the show cause notice and accompanying documents on 23.01.2023. They submitted that no mercy should be shown due to latches, citing the Supreme Court decision in Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited. They further argued that the petitioner cannot file a statutory appeal, referencing Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others, and pressed for dismissal of the writ petition.