Mrs. Sharma Glass And Plywoods vs. The Commercial Tax Officer

Held

The Court allowed the petition in part, quashing the Adjudication Order dated 29.07.2024. The Court found that the petitioner was indeed extended an opportunity to file a reply on 29.06.2024, which was after the date referenced in the Adjudication Order. This fact, coupled with the petitioner's submission that they had bonafide reasons for not appearing and filing objections, satisfied the Court that an opportunity should be extended. The Court reasoned that while the petitioner had not availed the opportunities provided, the circumstances warranted granting a further chance to present their case. The ratio decidendi is that if a taxpayer demonstrates bonafide reasons for non-compliance and a demonstrable opportunity to respond existed post-adjudication, the Adjudication Order can be set aside to allow for a proper hearing. The petitioner was granted liberty to file a response to the show cause notice and produce documents for reconciliation by 03.12.2026 or as further extended by the respondent.

Facts

The petitioner, Mrs. Sharma Glass and Plywoods, filed a writ petition challenging the Adjudication Order dated 29.07.2024, issued by the Commercial Tax Officer under Section 73 of the CGST/KGST Act, 2017. The order confirmed the show cause notice proposing to demand tax, interest, and penalties. The respondent authority stated that the petitioner failed to appear for a personal hearing on 10.06.2024 and did not file any objections or discharge the tax liability. The petitioner contended that they did not appear due to a bonafide belief that an opportunity to file a response was extended until 29.06.2024, and that they had prepared objections but not filed them for similar reasons. The proceedings were initiated based on a discrepancy between Form GSTR-2A and Form GSTR-3B regarding Input Tax Credit claims.

Key Issues

1. Whether the petitioner was denied a reasonable opportunity to present their case before the Adjudication Order dated 29.07.2024 was passed, as contemplated under Section 73 of the CGST/KGST Act, 2017? Petitioner's Arguments: The petitioner argued that they failed to file a response and participate in the personal hearing due to a bonafide belief that the opportunity to file a response was extended until 29.06.2024. They also contended that it is the practice to extend personal hearing opportunities after a reply is filed, and that they had prepared objections but could not file them for bonafide reasons. Furthermore, they claimed they could reconcile the discrepancies between Form GSTR-2A and Form GSTR-3B by filing relevant documents. Respondent's Arguments: The respondent, through the High Court Government Pleader, did not explicitly present arguments against the petitioner's claims but relied on the fact that the petitioner was provided an opportunity to file a reply on 29.06.2024, which was after the date mentioned in the Adjudication Order.