The absence of a show-cause notice before imposing penalties under the GST Act violates principles of natural justice, necessitating remand for proper procedure.

ORAL ORDER

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

1. Heard learned advocate Mr. Sahil J. Rao for the petitioner learned advocate Ms. Nidhi Vyas for respondent No.2 and 3.

2. By this petition under Articles 227 of the Constitution of India, the petitioner has prayed for the following reliefs:

“5.2 That Your Lordships may be pleased to issue a writ of Certiorari or any other appropriate writ and quash and set aside the order No. ORDER-IN- APPEAL No. VAD-CGST-002-APP-ADC-170- 2022023 dated 22.11.2022 passed by the Ltd Commissioner, GST & Central Excise, Appeals, Vadodara-II at Annexure G.

5.3 That Your LORDSHIPS may be pleased to issue a Writ of Mandamus or any other appropriate writ while directing or instructing the respondent No.2 to refund the double tax paid by the petitioner along with interest for the month of November and December,2020.”

3. Brief facts of the case are that the petitioner was subjected to the insolvency proceedings under the provisions of the Insolvency Bankruptcy Code,2016 [for short ‘IBC’] since 2018 and proceedings of Corporate Insolvency Resolution Process (CIRP) were initiated by the National Company Law Tribunal [‘NCLT’ for short], Ahmedabad Bench vide CP (IB) No. 587 of 2018.

3.1 By order dated 27.05.2020, NCLT appointed the respondent No.4 as Interim Resolution Professional (IRP) to manage the company with effect from the date of order under section 9 of the IBC.

3.2 Respondent No.4-IRP failed to obtain the registration of the petitioner as per the Notification No. 11/2020 dated 21.03.2020 issued by the Central Board of Indirect Taxes and Customs (CBIC). Respondent No.2 issued various communications and Emails, however, the same were not replied by the IRP. The IRP thereafter obtained the fresh GST registration in name of the petitioner for the GST registration 24AACCJ7283K1Z9 w.e.f. 07.12.2020 and filed the return as required under the provisions of Central Goods and Service Tax Act, 2017 (for short ‘CGST Act’).

3.3 Thereafter, notice dated 22.01.2021 was issued in Form ASMT-13 read with section 62 of the CGST Act and order was passed for non-filing of GSTR-3B for the period of July 2020 to December, 2020 determining the total tax, interest and penalty payable at Rs. 28,53,152/-. It is the case of the petitioner that no opportunity of hearing was given by issuing any show-cause notice to the petitioner for levy of penalty of Rs. 13,95,000/- as required under section 126(3) of the CGST Act.

3.4 On 14.12.2021, the NCLT passed an order pursuant to the order of the National Company Law Appellate Tribunal [NCLAT] and settled the agreement between the corporate debtor and the petitioner disposing of the proceedings pending before it and handed over the management and control of the Board of Directors of the petitioner.

3.5 After regaining the control of the company, the petitioner filed required return in Form GSTR-3B in the month of March 2022 for the period from July 2020 to December,2020 and paid the tax dues including for the period of November and December 2020 for which, IRP had filed returns and paid taxes in new GST registration obtained by him.

3.6 The petitioner preferred an appeal before the Commissioner, GST & Central Excise, Appeals, Vadodara-II on 01.04.2022 challenging the order in Form ASMT-13 passed by respondent No.2 for levy of tax, interest and penalty. The petitioner also prayed to refund the tax paid by IRP for the month of November and December, 2020.

3.7 Respondent No.1-appellate authority vide order dated 22.11.2022 disposed of the appeal and rejected the prayers of the petitioner. Being aggrieved, the petitioner has preferred this petition as the GST Tribunal is not formed under the provisions of the GST.

4. Learned advocate Mr. S.J.Rao for the petitioner submitted that the petitioner is entitled to the refund of the amount of GST paid by IRP for November and December, 2020 as the same was again paid by the petitioner in the month of March, 2022 when the management and control of