GST Dept. To Consider Reply to SCN Sent By Assessee Through post and Not Portal: Madras High Court

The Madras High Court has held that the GST Department should consider a reply to a show cause notice even if it is sent by the assessee through the post and not the portal.

While rejecting the objection of the department that the postal/physical reply to them shall not be considered, the single bench of Justice M. Nirmal Kumar has directed the department to give an opportunity for personal hearing to the petitioner, hear the objections, peruse the documents submitted and the explanations.

The petitioner contended that the show cause notice was issued to the petitioner for revoking the erroneous refund claim. The petitioner sent a reply which has been received by the respondent. It could be seen through the tracking of the postal department as well as the letter from the postal department. The petitioner had received the adjudication order passed by the respondent, wherein it is stated that, as a part of the principles of natural justice, a personal hearing was offered to the petitioner, and since no one appeared, an adjudication order was passed.

The petitioner contended that he had sent a hard copy of the reply to the show cause notice, which was not considered. As per Section 75(4) of the Central Goods and Service Tax Act, 2017, it is clearly held that "an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against the such person". When the adjudication officer, on completion of adjudication, decides to impose a penalty or any penalty imposed against the assessee, naturally, an opportunity is given. However, the petitioner was not given an opportunity to. The petitioner submitted that the personal hearing notice was not sent to the portal register of the respondents beyond the period of thirty days on January 8, 2022, by postal.

The department contended that as per Section 169, the circumstances under which the notice has to be served are stated in which one of the modes is through email. The personal hearing details have been posted on the portal by sending a communication to the email address provided at the time of registration of the assessee/dealers and by making the information available on a common portal. Likewise, notices have been sent through email.

The petitioner produced a screenshot of the details available in the portal on 20.08.2022 wherein it shows a show cause notice under Section 73 and 74 and GST DRC-01 was initiated and issued on 30.11.2021 and the due date to reply is on 30.12.2021, confirming the refusal of personal hearing details.

The court held that the only objection of the department is that the postal or physical reply was not considered since it was not sent through a portal. The petitioner deserves a personal hearing so that his objections can be heard.

The court directed the respondent to fix the personal hearing date for the petitioner, give him an opportunity to receive any documents if produced, and thereafter proceed with the show cause notices.

Case Title: Asia (Chennai) Engineering Company Private Limited Versus The Assistant Commissioner (ST) (FAC)

Citation: 2022 LiveLaw (Mad) 431

Case No: W.P.(MD).Nos.13851 and 13870 of 2022 and W.M.P.(MD).Nos.9853, 9854, 9864 and 9866 of 2022

Date: 22.08.2022

Counsel For Petitioner: Advocate N.Murali

Counsel For Respondent: Special Government Pleader P. Subbaraj

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