Lenovo India Private Limited vs Assistant Commissioner GST & Central Excise, Chennai

What is the validity of ex-parte order passed on the ground that opportunity of personal hearing was granted before due date of filing reply to show cause notice ? Facts and Timelines: Petitioner “L” filed a Refund Application for IGST paid on supply of goods to SEZ Units. 22-Nov-2022: SCN was issued by the Officer to submit their reply with 15 days but the Petitioner was directed to appear before him on 28-Nov-2022 at 3pm. Therefore the time to file reply was 15 days but hearing 7 days later. 02-Dec-2022: Petitioner filed his reply and requested for Personal hearing. 13-Dec-2022: Order was passed by the Officer rejecting Refund Claim amounting to Rs. 8,52,78,067/- without providing them personal hearing 

As seen from the impugned assessment order, no personal hearing has been afforded to the petitioner and the objection raised by the petitioner in its reply dated 02-Dec-2022 has also not been considered. It is clear that the principles of natural justice has been violated by the respondent before passing of the impugned order rejecting the petitioner’s application for refund. Accordingly, the impugned order is hereby quashed and the matter is remanded back to the respondent for fresh consideration on merits and in accordance with law.

1.The petitioner has challenged the impugned order dated 13.12.2022, rejecting their application seeking refund, on the ground of violation of principles of natural justice.

2. The petitioner claims that a show cause notice was issues to them on 21.11.2022 at 18:17:33 hrs, calling upon the petitioner to submit their reply within 15 days from the date of service of the notice. However, in the notice dated 21.11.2022, the operative portion calls upon the petitioner to appear before the respondent on 28.11.2022 at 03.00 p.m. either through physical / virtual hearing. It also states that if the petitioner fails to furnish a reply within the stipulated date or fails to appear for hearing on the
appointed date and time, the case will be decided exparte on the basis of the available records and on merits. 2/7 https://www.mhc.tn.gov.in/judis W.P.No.1863 of 2023.

3. Admittedly, the show cause notice dated 21.11.2022 issued at 18:17:33 hrs to the petitioner, calls upon the petitioner to submit a reply within a period of 15 days. But, however, in the very same show cause notice, the petitioner has been called upon to appear before the respondent on 28.11.2022 at 03:00 p.m. either through physical / virtual hearing. Having given time for the petitioner to submit a reply within a period of 15 days from 21.11.2022 at 18:17:33 hrs, the respondent ought not to have called the petitioner for physical / virtual hearing o 28.11.2022 at 03:00 p.m. within a period of seven days from 21.11.2022 being the date of the show cause notice.

4. The petitioner has also submitted a reply thereafter on 02.12.2022 to the show cause notice dated 21.11.2022 sent by the respondent at 18:17:33 hrs. In the reply dated 02.12.2022, the petitioner has also sought for a personal hearing. However, as seen from the impugned assessment order, no personal hearing has been afforded to the petitioner and the objection raised by the petitioner in its reply dated 02.12.2022 has also not been considered. 3/7 https://www.mhc.tn.gov.in/judis W.P.No.1863 of 2023.

5. Learned standing counsel appearing for the respondent has also received instructions and does not dispute the statements made by the petitioner in the Affidavit filed in support of this Writ Petition with regard to the dates and events referred to supra. Therefore, it is made clear that the principles of natural justice has been violated by the respondent before passing of the impugned order rejecting the petitioner’s application seeking for refund.

6. Hence, the impugned order has to be quashed and the matter has to be remanded back to the respondent for fresh consideration on merits and in accordance with law, within a time frame to be fixed by this Court.

7.Accordingly, the impugned order is hereby quashed and the matter is remanded back to the respondent for fresh consideration on merits and in accordance with law. The respondent shall pass final orders within a period of twelve weeks from the date of receipt of a copy of this order, after adhering to the principles of natural justice and by affording a personal hearing to the petitioner. 4/7 https://www.mhc.tn.gov.in/judis W.P.No.1863 of 2023.

8. Accordingly, this Writ Petition is disposed of. No Costs. Consequently, the connected Writ Miscellaneous Petition is closed.

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Lenovo India Private Limited

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