GST Update

Desk of CA. Praveen Sharma – 865 Series (CAPS)

Calcutta High Court – Solar Panel Installation Firm vs. Assistant Commissioner, State Tax (Jalpaiguri)

The petitioner, engaged in solar panel installation, challenged an order under Section 73(9) of the WBGST Act, 2017, stating that the department did not give a fair chance to reply to the show cause notice (SCN) dated May 16, 2024 for FY 2019-20.

The taxpayer said that all documents were given to his previous consultant, who failed to file a reply or attend the hearing, leading to an ex-parte order. A new consultant was later appointed.

The State argued that business owners must stay alert and cannot place full responsibility on consultants.

The Court, after reviewing Sections 73 and 75 of the WBGST Act, held that when an adverse decision is proposed, an effective opportunity of hearing must be given.

It found that the SCN had contradictory hearing and reply dates, making the process defective.

Referring to the Supreme Court ruling in Rafiq & Anr. v. Munshilal & Anr. (1981), the Court held that a litigant should not suffer due to a consultant’s negligence.

The High Court set aside the order and allowed the petitioner to file a reply within two weeks of receiving the order. The authority must then conduct a hearing and issue a reasoned order within four weeks.

If the taxpayer fails to reply within the given time, the relief will lapse automatically. No costs were awarded.

Link:  CA. Praveen Sharma on Linkedin