The Delhi High Court has reprimanded the Goods and Service Tax (GST) authority for unnecessarily delaying the case.
The petitioner, Jupiter Exports sought to set aside the demand order dated 25.03.2021, passed by the respondent under Section 74(9) of the Central Goods and Services Tax, 2017 (‘the CGST Act’), raising a total demand of ₹6,67,74,062/-, which includes the tax amount of ₹2,88,90,416/-, interest for a sum of ₹89,93,230/-, and penalty to the tune of ₹2,88,90,416/- for the tax period of April 2018 to March 2019.
The petitioner has challenged the impugned order principally on the ground that the same has been passed in gross violation of the principles of natural justice as the petitioner was not afforded an opportunity for a personal hearing before passing the impugned order by the respondent.
The matter was listed for the first time before the Court on 19.07.2021. Later it was adjourned to 31.08.2021 and on the said date the counsel appearing for the respondent stated that the counter affidavit has been filed but the same was not on record.
Further adjourned the matter to 05.05.2022 due to paucity of time. On 05.05.2022, none appeared for the respondent. A fresh notice was issued to the respondent and the matter was directed to be listed before the learned Registrar for completion of service and pleadings on 16.12.2022.
The petitioner submitted that the impugned order has been admittedly passed without granting any personal hearing to the petitioner. The petitioner has been mulcted with a huge demand of tax along with the penalty, without affording the petitioner any opportunity of hearing.
Notice under Section 74(3) of the CGST Act was issued to the petitioner by the respondent on 23.02.2021. It was directed that the reply be filed within 15 days of receipt of the said notice.
Almost two years of judicial time has been wasted only for the reason that the respondent at first wanted to place the counter affidavit on record and then sought further time to file the counter affidavit. The respondent in utter disregard to the judicial time and to the statement made before the Court as well as before the Registrar then decided to contest the present writ petition without filing any affidavit of the concerned officer.
A Division bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan imposed a cost of ₹5,000/- on the respondent. The cost is directed to be deposited with the Delhi State Legal Services Authority within a period of four weeks.
The bench while quashing the tax demand said that such practices cannot be “countenanced “as it has the effect of not only causing harassment to the litigants but also wasting precious judicial time of the court.
Further held that the order be also sent to the Commissioner of GST, Department of Trade and Taxes, Vyapar Bhawan, IP Estate, New Delhi for necessary information and compliance and if it is found that there is dereliction of duties on the part of the concerned officer, appropriate action for recovery of the amount from the salary of the officer be taken.
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