Writ Petition Against GST Demand Disposed: Orissa HC Grants Liberty to File Fresh Representation [Read Order]

The Orissa High Court disposed of a writ petition filed by Ashraf Petrol Pump challenging a demand order under the Odisha Goods and Services Tax Act, 2017 (OGST Act). The Court granted liberty to the petitioner to file a fresh representation before the appropriate authority and seek a hearing under the law. The petitioner had approached the Court seeking to set aside the demand order issued under Section 74 of the OGST Act, alleging non-compliance with the principles of natural justice.

The petitioner, Ashraf Petrol Pump, a registered dealer under the OGST Act, received a demand order from the tax authorities alleging wrongful availment of Input Tax Credit (ITC). According to the petitioner, the said order was issued without a proper show cause notice in Form GST DRC-01 and without affording a personal hearing, as mandated under Section 75(4) of the Act.

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Challenging the demand order, the petitioner approached the High Court under Article 226 of the Constitution of India, seeking its quashing on the ground that the entire proceeding was vitiated due to procedural lapses and denial of a reasonable opportunity to be heard.

The counsel for the petitioner argued that the authorities failed to adhere to the mandatory provisions of Rule 142 of the OGST Rules, which require issuance of notice in the prescribed form before passing any demand order under Section 74. It was contended that no personal hearing was afforded to the petitioner, thereby violating the safeguards guaranteed under Section 75(4) of the OGST Act.

It was further submitted that the entire adjudication process was carried out behind the petitioner’s back, and that the order lacked proper reasoning or reference to any submissions from the assessee.

The state’s counsel submitted that the petitioner had been issued a notice and that a hearing date had been fixed. However, the petitioner failed to appear on the scheduled date, and the order was passed thereafter.

Taking note of this submission, the Court observed that while it may have been ideal for the department to issue a more detailed and structured order, the record did not support the petitioner’s claim that no opportunity was provided at all.

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The matter was heard by Chief Justice Harish Tandon and Justice M.S. Raman, who observed that since the petitioner failed to appear on the date fixed and the order was passed thereafter, the Court would not be inclined to quash the impugned order on that ground alone.

Nonetheless, recognising the need for fairness, the Court permitted the petitioner to make a fresh representation before the authority concerned. Suppose such a representation is filed within 15 days. In that case, the tax authority has been directed to reconsider it and pass a reasoned order after granting the petitioner an opportunity to be heard.

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