The Kerala High Court quashed show cause notice (SCN) issued without giving proper opportunity of hearing in the matter of GST demand.
The appellant filed the writ petition before the Single Judge impugning the order passed by the 1st respondent, State Tax Officer. The Single Judge dismissed the writ petition relegating the appellant to alternative appellate remedy. It is challenging the said judgment.
The appellant, an assessee under the GST Act on the rolls of the 1st respondent, had filed returns and paid tax thereon for the assessment year 2017-18. The 1st respondent proposed to demand tax along with interest on the alleged non payment of tax due of `77,204.88/- as in the GSTR-1 return and claim of excess input tax credit of `4,23,463/-.
The appellant gave reply and thereafter, the 1st respondent issued show cause notice demanding tax and interest under Section 73. The appellant uploaded reply in Form GST DRC-06 along with necessary attachments through the registered web portal of GST Department. The appellant specifically requested for an opportunity of personal hearing.
A Division Bench comprising Justice Dr AK Jayasankaran Nambiar and Justice Kauser Edappagath observed that “However, it appears that the 1st respondent issued the order finalising the demand without referring to reply or granting the appellant an opportunity for personal hearing. Thus, the impugned order clearly violates the principles of natural justice. Hence, we are of the view that the show cause notice cannot be sustained and it is liable to be set aside.”
“Accordingly, we allow the appeal setting aside the impugned judgment as well as the show cause notice. The 1st respondent is directed to pass fresh order after taking into account the contentions raised by the appellant in reply and after giving him an opportunity of personal hearing” the Court concluded.
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