2023 (5) TMI 1247 - HC - GST

Principles of natural justice - Notice in the proceedings was issued to the petitioner on 21.10.2022 seeking his reply within 30 days - denial of opportunity of oral hearing before the Assessing Authority - HELD THAT - Reliance placed in the decision of coordinate bench in Bharat Mint Allied Chemicals 2022 (3) TMI 492 - ALLAHABAD HIGH COURT . Once it has been laid down by way of a principle of law that a person/assessee is not required to request for opportunity of personal hearing and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order, the fact that the petitioner may have signified 'No' in the column meant to mark the assessee's choice to avail personal hearing, would bear no legal consequence. The impugned order itself has been passed on 25.11.2022, while reply to the show-cause-notice had been entertained on 14.11.2022. The stand of the assessee may remain unclear unless minimal opportunity of hearing is first granted. Only thereafter, the explanation furnished may be rejected and demand created - Not only such opportunity would ensure observance of rules of natural of justice but it would allow the authority to pass appropriate and reasoned order as may serve the interest of justice and allow a better appreciation to arise at the next/appeal stage, if required. The matter is remitted to the respondent no.2/Assistant Commissioner, State Tax, Sector-6, Aligarh to issue a fresh notice to the petitioner within a period of two weeks from today - Petition allowed by way of remand.

Summary

Issues involved: Challenge to order passed by Assistant Commissioner for tax period April 2018, denial of opportunity of oral hearing before Assessing Authority.

Summary:
The petitioner challenged the order passed by the Assistant Commissioner for the tax period April 2018, where a demand in excess of Rs. 3 crores was raised. The main contention raised was the denial of the opportunity of oral hearing before the Assessing Authority. The petitioner argued that he was completely denied the opportunity of oral hearing as the Assessing Authority did not provide any chance for personal hearing as required by law.

The petitioner relied on Section 75(4) of the U.P. GST Act, 2017, and previous court decisions to support the claim that the Assessing Authority was obligated to afford an opportunity for personal hearing before passing an adverse assessment order. The petitioner emphasized that the absence of a hearing was contrary to established legal principles and cited relevant case law to strengthen the argument.

On the other hand, the revenue's counsel argued that the petitioner had declined the opportunity of hearing by selecting 'No' in the online reply to the show-cause notice. Therefore, they contended that the petitioner could not now claim any error in the order based on lack of hearing.

After hearing both parties and examining the record, the Court found that the Assessing Authority was indeed required to provide an opportunity for personal hearing before passing an adverse order. The Court emphasized the importance of ensuring minimal opportunity of hearing, especially in cases involving significant civil liability. Upholding principles of natural justice, the Court ruled in favor of the petitioner, setting aside the impugned order and remitting the matter back to the Assistant Commissioner to issue a fresh notice and provide a proper opportunity for hearing before proceeding further.