Telephone & E-mails can’t replace personal hearing: Bombay High Court remands matter to Original GST Authority for a fresh decision [Read Order]

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The Bombay High Court while remanding the matter to the original GST authority for a fresh decision ruled that the Telephone and Emails can not replace personal hearing.

The Petitioner, BA Continuum India Pvt. Ltd. is a company incorporated under the Companies Act, 1956. It is engaged in the business of providing information technology and information technology enabled services to customers located outside India.

The Representative of the petitioner personally met respondent authority and requested for personal hearing post-filing of reply. Due to technical glitches on the GSTN portal, the petitioner was initially not able to file its replies on the portal.

The replies were filed through various emails denying the allegations and contentions advanced in the show cause notices. However, the petitioner subsequently filed its respective replies to the show cause notices on the GSTN portal in the prescribed format.

The Authority while justifying the impugned orders,stated that those have been passed within the framework of the GST statute by following the principles of natural justice. Impugned orders are reasoned ones and do not suffer from the vice of arbitrariness. Show cause notices were issued to the petitioner framing proper charges; opportunity of being heard was granted to the petitioner at various stages in response to which petitioner through its representative had made submissions in response to the show cause notices. Impugned orders are speaking orders whereby and whereunder specific reasons have been given while disallowing the claim of the petitioner. Petitioner had forwarded written submissions via email which were duly taken into consideration. Petitioner also made submissions before the adjudicating officer on telephone.

The allegation of the petitioner that personal hearing was not granted has been denied.

The division bench of Justice Abhay Ahuja and Justice Ujjal Bhuyan clarified that the expression ‘opportunity of being heard is not an expression of empty formality. It is a part of the well-recognized principle of audi alteram partem which forms the fulcrum of natural justice and is central to fair procedure. The principle is that no one should be condemned unheard. It is not necessary to delve deep into the expression save and except to say that by way of judicial pronouncements the said expression has been made central to the decision-making process, breach of which would be construed to be a violation of the principles of natural justice thus adversely affecting the decision making process; a ground for invoking the power of judicial review.

“When the law requires that no application for refund shall be rejected without giving an applicant an opportunity of being heard, the same cannot be substituted by telephonic conversations and exchange of e-mails. This is more so in the case of a claim for a refund where no time-limit is fixed vis-a-vis rejection of the claim. Under sub-section (7) of section 54, a time-limit of 60 days is prescribed for making an order allowing the claim of refund; but that period of 60 days would commence from the date of receipt of the application complete in all respects (emphasis is ours) without there being a corresponding provision for rejection of application not complete in all respects,” the court said.

The court noted that no hearing was granted to the petitioner. Impugned orders, therefore, would be in violation of the proviso to sub-rule (3) of rule 92 of the CGST Rules and also in violation of the principles of natural justice.

Therefore, the court held that the matter should be remanded back to the original authority for a fresh decision in accordance with law after giving an opportunity of being heard to the Since respondent has already taken a view on merit by disclosing her mind which is adverse to the petitioner, it would be in the interest of justice and fairness if another competent officer is assigned the task of deciding the refund applications of the petitioner de novo on remand.

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