Failure to Avail Opportunity is different from Failure to Grant Opportunity of Hearing: Kerala HC Dismisses Petition against CGST Order [Read Order]

While dismissing the petition against the Central Goods and Services Tax (CGST) order, the Kerala High Court held that failure to avail an opportunity granted is different from failure to grant an opportunity for hearing.

Falcon Synergy Engineering Private Limited, the petitioner, challenged the order dated 08.08.2024 issued under Section 73(9) of the Central Goods and Services Tax Act/Kerala Goods and Services Tax Act, 2017. In the proceedings related to the financial year 2019-20, noticing that there was excess input tax availed by the petitioner for the said year, a show cause notice was issued on 16.05.2024.

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However, there was no response from the petitioner's side, and thereafter, a reminder notice was issued on 24.06.2024, and again on 04.07.2024, and yet again on 22.07.2024. On all those occasions, petitioner failed to respond and did not avail the opportunity granted for a personal hearing. Thereafter, the State Tax Officer issued the impugned order.

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Subsequently, the petitioner claims to have filed a rectification petition on 29.01.2025, which was not apparently accepted by the authority. Petitioner challenges the impugned order of determination of tax, contending that they were not granted an opportunity of hearing and also that the excess input tax availment arose out of a clerical mistake, and if properly appreciated, no liability would arise. Petitioner asserts that the clerical mistake committed by its staff has resulted in the huge liability imposed upon it.

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On a perusal of the impugned order, it is evident that petitioner was given opportunities to respond in the form of a show cause notice followed by three reminders. Petitioner is a business establishment carrying on regular business activities. The show cause notice issued in 2024, even if it be only in the portal, is a mode of notice prescribed the statute. As a private limited company, petitioner cannot feign ignorance of such a notice or the reminder notices which were issued over a period of three months. In such circumstances, it cannot be stated that the petitioner was not granted an opportunity of hearing.

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A single bench of Justice Kurian Thomas ruled that failure to avail the opportunity granted is different from failure to grant an opportunity of hearing. The bench viewed that the petitioner cannot agitate that he was not granted an opportunity of hearing. If the opportunity was not availed by the petitioner, it is due to its own default. The blame cannot be put upon the respondents.

The court dismissed the petition,  reserving the liberty of the petitioner to prefer statutory remedies.

To Read the full text of the Order CLICK HERE

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