Bombay High Court: Holding Telephone & E-mails can't replace personal hearing The Bombay High Court (HC) on 8 March 2021, in the case titled BA Continuum India Pvt. Ltd. (Petitioner) v. Union of India and others (Respondent) remanded the matter to the original Goods & Services Tax (GST) authority for a fresh decision and ruled that the Telephone and Emails cannot replace...
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Bombay High Court: Holding Telephone & E-mails can't replace personal hearing
The Bombay High Court (HC) on 8 March 2021, in the case titled BA Continuum India Pvt. Ltd. (Petitioner) v. Union of India and others (Respondent) remanded the matter to the original Goods & Services Tax (GST) authority for a fresh decision and ruled that the Telephone and Emails cannot replace personal hearing.
The HC division bench comprising of Justices Abhay Ahuja and Ujjal Bhuyan explained that the expression 'opportunity of being heard is not an expression of empty formality'. It is a part of the well-recognized principle of audi alteram partem which forms the fulcrum of natural justice and is central to fair procedure.
The factual matrix of the case is that the Petitioner is a company incorporated under the Companies Act, 1956. It has been engaged in the business of providing information technology and information technology enabled services to customers located outside India.
The petitioner's representative met the respondent authority and requested for personal hearing post-filing of reply. Due to technical glitches on the GSTN portal, the petitioner was unable to file its replies on the portal. The replies were filed through various emails denying the allegations and contentions advanced in the show cause notices (SCN).
Subsequently, the petitioner filed its respective replies to the SCN on the GSTN portal in the prescribed format. The Authority while justifying the impugned orders stated that those have been passed within the framework of the GST statute by following the principles of natural justice.
The Petitioner spoke to the adjudicating authority over the telephone. It was alleged by the petitioner that a personal hearing was not granted and the same has been denied.
The HC stated that "Principle is that no one should be condemned unheard. It is not necessary to delve deep into the expression save and except to say that by way of judicial pronouncements the said expression has been made central to the decision-making process, breach of which would be construed to be a violation of the principles of natural justice thus adversely affecting the decision making process; a ground for invoking the power of judicial review."
The Court added, "When the law requires that no application for refund shall be rejected without giving an applicant an opportunity of being heard, the same cannot be substituted by telephonic conversations and exchange of e-mails. This is more so in the case of a claim for a refund where no time-limit is fixed vis-a-vis rejection of the claim."
It further explained that "Under Section 54(7), time limit of 60 days is prescribed for making an order allowing the claim of refund; but that period of 60 days would commence from the date of receipt of the application complete in all respects (emphasis is ours) without there being a corresponding provision for rejection of application not complete in all respects."
The HC observed no hearing was granted to the petitioner and hence the impugned orders would be in violation of the proviso to sub-rule (3) of Rule 92 of the CGST Rules and also in violation of the principles of natural justice.
It relied on the judgment of the case in Yashwant Gajanan Joshi v. Hindustan Petroleum Corporation, AIR 1988 Bombay 408, wherein the Court had repelled the contentions of the respondents that in view of the availability of alternative remedy, relief under writ jurisdiction should be declined. It has been held that an order which is in violation of the principles of natural justice would be non est.
The HC held that the matter should be remanded back to the original authority for a fresh decision in accordance with law after giving an opportunity of being heard to the Since respondent has already taken a view on merit by disclosing her mind which is adverse to the petitioner, it would be in the interest of justice and fairness if another competent officer is assigned the task of deciding the refund applications of the petitioner de novo on remand.