Facts of the Case

The appellant, Murtaza B Kaukawala, filed this intra-court appeal before the High Court at Calcutta against an order dated 18.07.2023 passed by the learned Single Bench in WPA 16299 of 2023, whereby interim relief was refused, though the writ petition itself was entertained. The underlying grievance was against an order of the appellate authority under the West Bengal Goods and Services Tax Act, 2017, rejecting the appellant's statutory appeal as time-barred. That appeal had been filed against an assessment order passed by the Assistant Commissioner under Section 74 of the GST Act, 2017, dated 09.02.2022, making the appellant liable for payment of GST. The principal grounds urged before the appellate authority were violation of the principles of natural justice — that only a summary of the show cause notice, and not the show cause notice itself, was furnished to the appellant, and that no opportunity of personal hearing was granted.

Issues Involved

  1. Whether the appellate authority was justified in rejecting the appeal as time-barred without considering the appellant's grievance that the underlying assessment order under Section 74 was passed in violation of principles of natural justice.
  2. Whether non-communication of the full show cause notice (as opposed to merely its summary) and denial of personal hearing vitiated the original assessment proceedings.
  3. What relief was appropriate in an intra-court appeal against refusal of interim relief, where the underlying writ petition itself remained pending.

Petitioner's Arguments

  • The appeal before the appellate authority was filed principally on the ground of violation of principles of natural justice, since the appellant was not provided any real opportunity to respond.
  • Only the summary of the show cause notice was furnished to the appellant; the show cause notice itself was never communicated.
  • Furthermore, no opportunity of personal hearing was granted before the Section 74 assessment order dated 09.02.2022 was passed.

Respondent's Arguments

  • Opportunity had in fact been granted by the assessing officer, but the appellant did not avail of it.

Court Order/Findings

  • Considering the facts, circumstances and the allegations made by the appellant regarding non-communication of the show cause notice and denial of personal hearing, the Division Bench found it appropriate to remand the matter rather than adjudicate the time-bar question in the appeal.
  • The intra-court appeal and the writ petition were both disposed of, the appellate authority's order rejecting the appeal as time-barred was set aside, and the original assessment order dated 09.02.2022 passed under Section 74 of the GST Act was directed to be treated as a fresh show cause notice, with the appellant permitted to submit a reply within three weeks.
  • The assessing authority (Assistant Commissioner, N.S. Road & M.R. Charge) was directed to grant an opportunity of personal hearing after receipt of the reply and thereafter pass fresh orders on merits, in accordance with law.

Important Clarification

Where an assessee alleges that a Section 74 assessment order was passed without communicating the actual show cause notice (only its summary) and without personal hearing, an appellate rejection on limitation grounds can be bypassed by treating the assessment order itself as a fresh show cause notice on remand — allowing the assessee a real opportunity to reply and be heard — rather than requiring the natural-justice grievance to be litigated through the ordinary appeal/limitation route.

Sections Involved

  • Section 74, WBGST Act, 2017 — governs determination of tax not paid or short paid by reason of fraud, wilful misstatement or suppression of facts; the assessment order under challenge.
  • WBGST Act, 2017 — the appellate provisions under which the time-barred appeal was originally rejected.

Decision – In Favour of

This decision is, in substantial part, in favour of the Assessee. The Division Bench set aside the appellate authority's time-bar rejection and gave the appellant a fresh opportunity to be heard on the merits of the Section 74 demand by treating the assessment order as a show cause notice; however, no final view was taken on the tax liability itself, which remains to be decided afresh.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court at Calcutta
  • Case No.: MAT/1361/2023
  • CNR: Not available
  • Coram: Hon'ble the Chief Justice T.S. Sivagnanam and Hon'ble Justice Hiranmay Bhattacharyya
  • Decision Date: 18 October 2023
  • Disposal Nature: Appeal and writ petition disposed of; matter remanded, assessment order treated as fresh SCN

Link to Download the Order

Download the full judgment (PDF)

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.