2021 (2) TMI 1034 - HC - GST

Violation of principles of natural justice - petitioner was not heard in person prior to passing of the impugned order - Section 75(4) of the Central Goods and Service Tax Act, 2017 - HELD THAT - It is true that neither Section 73 nor Section 74 specifically require an assessing officer to extend the opportunity of personal hearing to an assessee prior to completion of proceeding. However, Section 75 of the Act, a general provision relating to the procedure to be followed in determination of tax at sub section (4) thereof, contemplates that an opportunity of personal hearing shall be granted in all cases where a specific request is received, or where the officer contemplates adverse decision against the assessee. Thus, it is only in cases where the explanation offered by the assessee is accepted that there is no necessity for personal hearing. In all other cases, it is incumbent upon the revenue to extend an opportunity of personal hearing to the petitioner. This is the proper interpretation of Section 75(4). The petitioner will be heard on 29.01.2021 at 10.30 a.m. without expecting any further notice in this regard and consider materials, if any, circulated an order of assessment shall be passed denovo within a period of four (4) weeks from the date of hearing - Petition allowed - decided in favor of petitioner.

Summary

Issues: Violation of principles of natural justice due to lack of personal hearing before passing the impugned order. Interpretation of Section 75(4) of the Central Goods and Service Tax Act, 2017 regarding the requirement of granting personal hearing.

In this case, the petitioner challenged an order dated 24.08.2020 on the grounds of violation of principles of natural justice, asserting that they were not given a personal hearing before the order was passed. The petitioner relied on Section 75(4) of the CGST Act, which mandates the granting of a hearing upon specific request or when an adverse decision is contemplated against the taxpayer. The respondent, the Revenue, argued that no request for a personal hearing was received from the petitioner, and a reply to the show cause notice was submitted, requesting consideration of the explanation provided. The Revenue contended that without a specific request for a personal hearing, there was no obligation to provide such an opportunity.

The Court noted that while Sections 73 and 74 of the Act do not explicitly require a personal hearing before completion of proceedings, Section 75(4) outlines that a personal hearing must be granted when a specific request is made or when an adverse decision is anticipated. The Court emphasized that unless the explanation offered by the assessee is accepted, a personal hearing is necessary. The Court interpreted Section 75(4) to mandate the Revenue to provide a personal hearing to the petitioner in all cases except where the explanation is accepted without the need for further discussion.

Consequently, the Court allowed the writ petition, setting aside the impugned order and directing that the petitioner be heard on 29.01.2021 at 10.30 a.m. without additional notice. The Court instructed that any relevant materials should be considered, and a denovo order of assessment must be passed within four weeks from the date of the hearing. The connected Miscellaneous Petition was closed with no costs awarded.