GST, customs, excise case hearings to be virtual by default now: Expert views on pros and cons
Nov 8, 2024
Synopsis
GST case: The hearings of cases relating to Goods and Services tax (GST), Central Excise and Customs to be now made through virtual mode i.e. video conferencing. However if a taxpayer wants then by submitting a written request the proceedings can be conducted through physical mode. Read below to find out which mode is good for whom.
The finance ministry has made it mandatory for all Goods and Services Tax (GST), customs and excise departmental quasi-judicial/appellate authorities to conduct personal hearing for proceedings under the specified Acts through Video Conferencing (VC) i.e. in Virtual Mode. Exceptions to allow personal hearing in physical mode may be allowed on receipt of specific request from the party concerned and after recording the reasons for the same in writing, said Central Board of Indirect Tax & Customs (CBIC) in an internal circular dated November 5, 2024.
According to Kishore Kunal, Advocate on Record, Supreme Court of India, "All proceedings which are pending as on date will have to abide by the Circular."
Do note that the virtual mode of hearing was introduced in April 2020 and in August 2020 it was made mandatory. In July 2022, the ministry amended it's earlier order on the matter making virtual hearings optional. In November 2024, the ministry has made virtual hearings mandatory again.
Which mode of hearing is suitable for which GST registered taxpayers?
ET Wealth Online has asked various experts about the impact of this instruction. As per experts, while both virtual and physical modes of hearing have their own merits and demerits, the taxpayer needs to take a judgemental call on whether to ask for physical hearing or not.
Here's what experts are saying:
Kishore Kunal, Advocate on Record, Supreme Court of India: Both the physical mode and online mode have their own set of advantages and limitations. For instance, cases which have voluminous records and where several parties are involved are better and more effectively, done physically.
However, routine cases involving pure legal issues, which may require lesser time, can be done virtually. One must bear in mind that there are several multi-jurisdictional taxpayers who have their proceedings going on before various GST authorities in multiple states. For such taxpayers, making the virtual hearings mandatory will save a lot of travel time and cost. Further, it also ensures that the taxpayers have the benefit of attending hearings alongside their counsels/consultants which, in the ordinary course, may not be feasible on account of travel cost and time related issues.
At the same time, virtual proceedings may not be entirely feasible for cross-examination of witnesses; multi-party hearings; matters requiring in-depth hearings by referring to voluminous records. On the same lines, for taxpayers such as individuals or who are at remote locations or who have limited bandwidth access, physical hearings are more beneficial. Overall, it is a welcome move and will go a long way in ensuring procedural fairness, transparency and cost saving for the taxpayers.
Smita Singh, Partner, S&A Law Offices: By making virtual hearings mandatory, with exceptions, will enhance efficiency in litigation proceedings. This step aligns with India's digital transformation goals, facilitating quicker case processing and reducing logistical cost burdens for taxpayers and their representatives. Further, flexibility of allowing physical hearings ensures that while virtual hearings remain the standard, exceptional cases can still be addressed in person, maintaining fairness and accessibility. Furthermore, virtual hearings promote transparency, ease of access, and encourage taxpayer participation, especially for those in remote areas.
Shashank Shekhar, Partner, DMD Advocates: While personal hearings through virtual mode should certainly speed up the adjudication/ appellate process in a cost-effective manner, however, option to avail hearing in physical mode should also exist, which under the instructions, is only available by following a cumbersome process. Virtual hearing is an effective mode of representation, particularly at a time when the superior courts, including the Supreme Court, are imbibing technological advances in the manner in which the cases are heard and argued. However, in certain cases that involve interpretation of complex legal issues or require demonstration of elaborate facts and/ or figures, a physical hearing may still be preferred over virtual mode. The thrust on virtual mode of hearing is certainly a welcome move, particularly in cases with low tax effect. Virtual hearings should help in saving time and travel cost for the assessees.
Chartered aAccountant Hardik Kakadiya, president, Chartered Accountants Association Surat (CAAS): At last, sanity prevailed in the CBIC, to mandate a virtual hearing for adjudication and appellate proceedings. This will stop officers who have been using physical mode as a tool of harassing taxpayers. The recent CBIC instruction will surely help in reducing corruption and unprofessional behaviour of officers. It would be icing on the cake if similar instructions are also issued to SGST field formations.
Will quality of the GST proceedings remain the same?
Experts say that virtual mode of hearing of cases may improve the quality of the hearings.
"On an overall consideration of several factors, the quality of hearings will only improve with the instructions contained in the circular. One must not forget that most of the high courts and tribunals today are moving to a hybrid hearing mode and even in the tax/fiscal laws, the proceedings are moving towards faceless modes. Adopting technological advancements is the need of the hour and it should be followed," says Kunal.
Chartered Accountant Siddharth Surana says that all virtual proceedings are recorded, and the recording link is shared with taxpayers for their own reference. "The recording is done based on an implied consent by taxpayers," says Surana.
Smita Singh, Partner, S&A Law Offices, says that the government needs to strengthen the computer hardware and software capabilities in order to ensure the quality of the proceedings are not hampered. "The information technology (IT) hardware should be strengthened to ensure maintaining high quality of the proceedings, such as quality of technology, sound and picture, connectivity, so as to ensure minimal disruption and uninterrupted flow," says Singh.
Singh who has more than 15 years of experience in indirect taxation matters says that in GST proceedings sometimes it's better to take the physical hearing option rather than online.
"Practically, officers during virtual hearings have been seen to be distracted and not attentive towards the submissions made by the practitioners/ assessed mainly at an adjudication level. Further in GST matters, it becomes difficult to present the reconciliations and come to the same understanding with the officers/ adjudicators However, during physical personal hearing, officers are bound to be attentive and engaged in oral submissions of the taxpayers," says Singh.
[The Economic Times]
