The Calcutta High Court has held that assessees cannot be permitted to frustrate adjudicatory process provided in GST Act.
The bench of Justice Raja Basu Chowdhury has observed that especially when the response to the show-cause was filed more than two months after the date for filing the response had expired. No explanation for the delayed response was noted in the rectification application. There appears to be no valid ground for invoking Section 161 of the GST Act.
The petitioner/assessee was served with a show cause notice in Form GST DRC 01 on 18th September, 2023. The petitioner claims to have given response to the said show cause on 15th December, 2023. In the interregnum, however, an order in original was passed on 14th December, 2023. The demand was, however, raised on the basis of the aforesaid order on 20th December, 2023 in Form GST DRC 07.
Still later, sometime on 26th January, 2024, the petitioner made an application for rectification of the above order by invoking the provisions of Section 161 of the GST Act on the ground that the petitioner had submitted a detailed reply which had not been considered.
According to the petitioner, the petitioner after having received the order sheet of the audit report under Section 65(6) of the GST Act, for the Siliguri Circle in respect of the financial year 2017-18, 2018-19 and 2019-20, had paid the entire tax and interest including the penalty in Form GST DRC 03, however, without considering the same the order impugned had been passed.
The department contended that since the petitioner did not respond to the show cause, the order impugned has been passed ex parte. By referring to the order impugned he would submit that the petitioner was duly afforded with an opportunity of hearing, however, the petitioner did not avail the same. On the issue of uploading the Form GST DRC 07 on the portal on 20th December, 2023 he would submit that since there was heavy workload there was delay in uploading the demand raised in Form GST DRC-07, the same has nothing to do with the order which was separately issued.
The petitioner contended that show cause does not conform to the statutory provisions. The same does not indicate the date of personal hearing. The petitioner was not afforded with any personal hearing. The respondents were duty bound to consider the petitioner’s response, at least, when the petitioner had filed a rectification application. The factum of the audit conducted by the respondents ought to have been taken into consideration, which had not been done.
The court held that there appears to be no valid ground for invoking Section 161 of the said Act. The petitioner has an alternative remedy in the form of an appeal, the petitioner however, chose not to invoke such remedy and after more than a year from the date of passing of the order under Section 73 of the GST Act, the instant writ petition has been filed that too after more than a month from the date of the order of rejection of the rectification application.
Case Details
Case Title: Upendra Mahato Versus Union of India & Ors.
Case No.: WPA 31078 of 2024
Date: 29.04.2025
Counsel For Petitioner: Himangshu Kumar Ray
Counsel For Respondent: Kaushik Dey
