Facts of the Case

The petitioner, Chanchal Ray, challenged an intimation order dated 22 April 2022, whereby the GST authorities called upon him to reverse the disputed amount along with applicable interest and penalty under the relevant provisions of the GST law.

The petitioner disputed the demand and submitted a detailed representation dated 18 July 2022, denying the liability and requesting the authorities to reconsider the matter. Despite the submission of the representation, no decision had been taken on the same, leading the petitioner to approach the Calcutta High Court by filing the present writ petition.

Issues Involved

  1. Whether the GST authorities were required to consider the petitioner's representation before proceeding further.
  2. Whether the petitioner was entitled to an opportunity of personal hearing before any adverse decision.
  3. Whether the High Court should interfere at the stage of an intimation order when the representation remained pending.

Petitioner's Arguments

  • The petitioner contended that the demand raised through the impugned intimation was not legally sustainable.
  • It was submitted that a detailed representation had already been filed denying the alleged liability.
  • The petitioner requested that the authorities be directed to decide the representation in accordance with law after granting an adequate opportunity of hearing before taking any further action.

Respondent's Arguments

  • The CGST authorities submitted before the Court that no coercive action had been initiated against the petitioner pursuant to the impugned intimation.
  • The respondents maintained that the matter could appropriately be considered by the competent authority in accordance with law.

Court Order / Findings

The Calcutta High Court disposed of the writ petition with the following directions:

  • The concerned GST authorities shall consider and dispose of the petitioner's representation dated 18 July 2022.
  • The authority shall pass a reasoned and speaking order strictly in accordance with law.
  • The petitioner or his authorised representative shall be provided an adequate opportunity of hearing.
  • The entire exercise shall be completed within two weeks from the date of communication of the Court's order.
  • The Court expressly clarified that it had not examined the merits of the representation, leaving the competent authority free to decide the matter independently in accordance with law.

Important Clarification

  • An intimation under the GST law does not automatically justify coercive recovery without following due process.
  • Where a taxpayer submits a representation disputing the proposed demand, the authority is expected to consider it fairly and pass a reasoned order.
  • The principles of natural justice, including granting an opportunity of hearing, must be followed before arriving at an adverse decision.
  • The High Court may direct the competent authority to decide the pending representation without expressing any opinion on the merits of the dispute.

 Section Involved

  • Relevant provisions relating to reversal of input tax credit, recovery of tax, interest and penalty under the Central Goods and Services Tax Act, 2017, along with the principles of natural justice governing adjudication proceedings.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785310259_2183compressed.pdf

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