GST Update No 309 on physical reply of SCN is also to be considered

The prolonged issue regarding improperly following the adjudication process and not affording reasonable opportunity of hearing to the assessee is prone to litigations from erstwhile regime. Consequently, the ultimate bearers are the assesses who have to face the difficulties in operating the business. Left with no other option, they have to knock the doors of court to seek relief. On similar note, one case was reported before Madras High Court in the case of M/S ASIA (CHENNAI) ENGINEERING COMPANY PRIVATE LIMITED V/S THE ASSISTANT COMMISSIONER. The decision imparted in this case is subject matter of discussion of our present update.
The show cause notice was issued to petitioner as on 30.11.2021 regarding recovering the erroneous refund granted to them. Thereafter, reply was filed by the petitioner as on 07.01.2022 which was received by authorities as on 10.01.2022. However, an order was subsequently passed stating that the petitioner failed to attend the personal hearing granted as on 17.02.2022 and 16.03.2022.
The petitioner contended that the adjudicating officer failed to consider the hard copy of submissions and reply of show cause notice sent on 07.01.2022. Further it was argued that the adjudicating officers failed to recognise the fact that an opportunity of hearing is to be provided before passing any adverse order. However, no such opportunity was given to the petitioner. The petitioner submitted that the personal hearing notice was not sent on the portal. Reference was drawn to bunch of cases of this court wherein it was held that personal hearing is to be granted before passing any order. The petitioner furnished screen shots of the details available on the portal on 20.08.2022 wherein show cause notice and DRC-01 was issued as on 30.11.2021 and the due date of reply is 30.12.2021, confirming the refusal of personal hearing details.The Counsel of revenue submitted that all the communications of the department and the assessee are to be done over portal itself. Since the show cause notice was also issued through the portal, the reply is also to be given through portal in 30 days. However, presently the written reply is submitted after 30 days. Further, the petitioner failed to present in the hearing as well. It was further argued that as per section 169 of the Act, the notice is to be served through e-mail.
The Court referred to section 73 of CGST Act, 2017 stating that any notice issued and summary has to be uploaded electronically on the portal in GST DRC-01. Later on, the word “electronically” was missing. It was stated that unregistered dealers do not have access to portal and therefore, necessarily are required to submit their replies or explanation through physical mode. When such is permitted for unregistered dealers, then registered dealers cannot be denied of same right of representation as well. Therefore, the revenue authorities should have considered the submissions of the assessees failing which will result into violation of principle of natural justice. The court therefore stated that petitioner deserves personal hearing so that his objections can be heard and documents are considered. The writ petitions are therefore disposed off.
Amidst the tussle of war between the department and the taxpayers, the above decision proved to be favourable decision for the business houses. In the above case, the court took a lenient approach taking into account the principles of natural justice. It is high time that judgements like these should be followed by departmental authorities as well before taking any action against the assessee so that unnecessary litigations and disputes can be avoided.

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GST Update No 309 on physical reply of SCN is also to be considered

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