10.03.2023: Ex-parte Order Passed In Pursuance of Hearing Scheduled Within Seven Days From The Date Of Show Cause Notice Not Sustainable – Madras High Court

MadrasThe Hon’ble High Court of Madras vide its order dated 01.02.2023 in the matter of M/s Lenovo India Private Limited (Represented by its Manager, Indirect Taxation, Shri Govindraya Pai) Awfis Space Solutions Vs. The Assistant Commissioner of GST & Central Excise, Guindy Division, Chennai South Commissionerate of Central Taxes in W.P. No. 1863 of 2023 and W.M.P. No. 1965 of 2023, set aside the impugned order which was passed on the basis of Show cause notice which provided 15 days’ time for filing reply, but in the very same show cause notice hearing was scheduled within seven days of the date of show cause notice. Moreover, the order was passed without providing a personal hearing and without considering the objection raised by the petitioner in its reply.

The Petitioner filed the writ petition before the Hon’ble High Court challenging the order dated 13.12.2022, whereby the petitioner’s application seeking refund was rejected on the ground of violation of principles of natural justice.

Facts Of The Case: –

  • That a show cause notice dated 21.11.2022 at 18:17:33 hrs, was issued to the petitioner, calling upon to submit their reply within 15 days’ of the service of notice. However, in the very same show cause notice, in the operative portion, the petitioner was called upon to appear before the respondent on 28.11.2022 at 3:00 p.m. either through physical/virtual hearing.  It was also stated in the show cause notice that if the petitioner fails to furnish a reply within the stipulated date or fails to appear for hearing on the appointed date and time, the case will be decided ex-parte on the basis of the available records and on merits.
  • That the petitioner responding to the said show cause notice, filed its reply on 02.12.2022, and the petitioner in the reply also requested for personal hearing.

That the above fact with respect to dates and events, was not disputed on the behalf of the respondent.

Held: –

  • The Hon’ble Court after considering the submissions made and facts of the case, found that when 15 days’ time was given to the petitioner for filing the reply to the show cause notice dated 21.11.2021, the respondent ought not to have called the petitioner for physical / virtual hearing on 28.11.2022 at 03:00 p.m. within a period of seven days from 21.11.2022 being the date of the show cause notice.
  • That it is quite evident from the impugned assessment order that no personal hearing was granted to the petitioner and the objection raised by the petitioner in its reply dated 02.12.2022 was also not considered.
  • The above facts have not been disputed on the behalf of the respondent and therefore, it clearly shows that the principles of natural justice has been violated by the respondent before passing of the impugned order rejecting the petitioner’s application seeking for refund.

The Hon’ble Court with the above findings, quashed the impugned order and remanded the matter back to the respondent for fresh consideration on merits and accordance with law.  The respondent shall pass final orders within a period of twelve weeks from the date of receipt of a copy of this order, after adhering to the principles of natural justice and by affording a personal hearing to the petitioner.

For more Judgments like this, Subscribe TAXO today

Register Today