GST Tax Demand Set Aside due to Assessee hospitalized and seriously unwell, Remanded Back for Fresh Hearing

Summary in Key Points:

Issue: Was the petitioner denied a reasonable opportunity of being heard, justifying setting aside the demand order?
Facts: The impugned order was passed pursuant to a demand-cum-show cause notice for penalty recovery. The petitioner submitted that he was hospitalized and seriously unwell when the notice was issued. His CA appeared for the personal hearing but allegedly couldn’t adequately represent his case.
Decision: The court, inclined to grant the petitioner one last opportunity to present his case, set aside the impugned order and remanded the matter for a fresh order after a proper hearing.

Important Note: This decision highlights the importance of providing a reasonable opportunity of being heard, even in cases of penalty demands. The petitioner’s hospitalization and subsequent inadequate representation by the CA constituted sufficient grounds for the court to intervene. The decision emphasizes that while penalties may be justified, the process leading to them must be fair and afford the assessee a meaningful chance to present their side of the story.

HIGH COURT OF ORISSA

Hemanta Kumar Sharma

Commissioner (Audit) GST and Central Excise

Arindam Sinha and M.S. Sahoo, JJ.

W.P.(C) No.27786 of 2024

DECEMBER 20, 2024

S.K. Mishra, Adv. for the Petitioner. T.K. Satapathy, Sr. Standing Counsel for the Respondent.

ORDER

1. Mr. Mishra, learned advocate, appears on behalf of petitioner and submits, under challenge is order in original dated 13^th December, 2023 pursuant to demand-cum-show-cause notice dated 17^th August, 2023 issued for recovery of penalty. He submits, his client was hospitalized between 22^nd April, 2023 to 6^th June, 2023 and again between 15^th October, 2023 to 17^th March, 2024. The time in between he was seriously unwell. In that time the demand-cum-show-cause notice was issued. His accountant, though appeared for personal hearing, could not properly represent his case before the authority. He seeks interference.

2. Mr. Satapathy, learned advocate, Senior Standing Counsel appears on behalf of revenue and submits, petitioner not only was represented at personal hearing, he has also lost his right of appeal by efflux of time. He opposes the writ petition.

3. Sequence of events regarding petitioner’s hospitalization, issuance of demand-cum-show-cause notice resulting in the order passed, move us to interfere. This is only because we want petitioner to have one last opportunity of representing his case before the authority. If he again suffers ill health requiring hospitalization or otherwise, which will be unfortunate but, same cannot be agitated any more.

4. Impugned order is set aside. Petitioner will forthwith communicate certified copy of this order to the authority, on or before 30^th December, 2024. Omission to do so will automatically restore impugned order. In event of communication, the authority will fix date of hearing as one further opportunity to petitioner and proceed to adjudicate and pass order afresh.

5. The writ petition is disposed of.