2020 (5) TMI 634 - HC - GST

Principles of Natural Justice - validity of assessment order - case of petitioner is that petitioner was not granted time to furnish objections to the show cause notice dated 12.12.2019 - HELD THAT - A bare perusal of the said show cause notice dated 12.12.2019, made available in the typed set of papers, clearly indicates that the respondent issued the show cause notice on 12.12.2019 and confirmed the said proposal also on the same day, which goes against the very basic principles of natural justice, as the petitioner/assessee was not at all given an opportunity to give their objections. Needless to say that an assessment cannot be made without giving an opportunity of hearing to the assessee. The very show cause notice dated 12.12.2019 in effect, confirming the proposal made therein without hearing the petitioner, cannot be sustained and consequently, the order impugned in this writ petition also cannot be sustained. However, as this Court is not inclined to go into the merits of the claim made by the respective parties arising out of the issue raised in the show cause notice, this court is inclined to remit the matter back to the respondent for redoing the assessment once again, after giving an opportunity to the petitioner to put forth their case by way of objections - Petition allowed by way of remand.

Issues: Violation of principles of natural justice in passing the assessment order

The judgment delivered by the High Court addressed the issue of violation of principles of natural justice in passing an assessment order dated 13.05.2020 in relation to GSTIN.No.33AANCS3782R1ZG. The petitioner contended that they were not granted sufficient time to furnish objections to the show cause notice dated 12.12.2019. The respondent, through Mr. M. Hariharan, acknowledged that the show cause notice was generated in a pre-determined format, confirming the proposal without allowing the petitioner to present their objections. The court observed that passing an assessment without providing an opportunity for the petitioner to be heard goes against the fundamental principles of natural justice. Consequently, the court set aside the impugned order and remitted the matter back to the respondent for reassessment, emphasizing the importance of granting the petitioner an opportunity to present their case by way of objections.

Analysis:
The court noted that the show cause notice dated 12.12.2019 confirmed the proposal on the same day it was issued, without affording the petitioner a chance to respond. This unilateral confirmation without a hearing was deemed a violation of natural justice, as an assessment cannot be made without giving the assessee an opportunity to be heard. The court emphasized the importance of providing a fair opportunity for the petitioner to present their objections before finalizing any assessment. Therefore, the court decided to remit the matter back to the respondent for a fresh assessment, instructing the petitioner to treat the summary of the show cause notice as the actual notice and reply within three weeks. Subsequently, the respondent was directed to provide a personal hearing to the petitioner and pass fresh orders within two weeks after receiving the reply. The court clarified that it was not expressing any view on the merits of the impugned order, leaving it to the parties to address during the reassessment proceedings.

Result:
In conclusion, the High Court allowed the writ petition, setting aside the impugned order and remitting the matter back to the respondent for a fresh assessment in compliance with the principles of natural justice. The court provided a clear timeline for the petitioner to respond to the show cause notice and for the respondent to conduct a personal hearing before issuing fresh orders. The judgment highlighted the significance of procedural fairness and the right to be heard in administrative proceedings, ensuring that the petitioner's objections are duly considered in the reassessment process.

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