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2021 (5) TMI 809 - HC - GSTConfirmation of demand of GST with interest and penalty - Non filing of reply to Show Cause notice (SCN) - non-compliance of mandatory provisions of sub-section (4) of Section 75 of the CGST Act, 2017 - Opportunity of hearing - HELD THAT - In the instant case, admittedly, proposing an adverse action, by way of a show cause notice, 1st respondent initiated action under the above provision of law. It is evident from a reading of the impugned order that on the ground that the petitioner herein failed to respond to the show cause notice by way of filing objections, 1st respondent herein confirmed the demand. When such a course of action is adopted by 1st respondent herein prejudicial to the interest of the assessee, the mandatory requirements of law as provided under sub-section (4) of Section 75 of the CGST Act, 2017 are required to be followed scrupulously. In the considered opinion of this Court, is liable to be set aside not only on the ground of deviation from the mandatory provisions under sub-section (4) of Section 75 of the CGST Act, 2017 but also on the ground of violation of principles of natural justice - matter remanded to 1 st respondent for consideration of the issue and for passing appropriate orders afresh after giving notice of hearing to the petitioner indicating the date and time of personal hearing - petition allowed by way of remand.
Issues:
Challenge to order of assessment under CGST Act, 2017 based on non-compliance of mandatory provisions of Section 75(4) - Opportunity of hearing and violation of principles of natural justice. Analysis: The judgment by the Andhra Pradesh High Court involved a challenge to an order of assessment under the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioner contended that the order confirming a tax demand of ?57,43,679/- and equal penalty and interest for a specific period was liable to be set aside due to non-compliance with the mandatory provisions of Section 75(4) of the CGST Act. The assessing authority had issued a revised show cause notice under Section 73 of the CGST Act, and the petitioner failed to respond within the stipulated time. The petitioner argued that the impugned order should be set aside based on this ground. The court considered the arguments presented by both parties. The learned Additional Advocate General-II representing the respondents contended that since the petitioner failed to respond to the show cause notice, they could not object to the order of assessment. It was also argued that the petitioner was provided with a full-fledged opportunity before the order was passed, and therefore, the writ petition was not maintainable due to the availability of an alternative remedy of appeal under Section 107 of the CGST Act. However, the petitioner explained that they could not file objections within the stipulated time due to certain reasons mentioned in the writ affidavit, but objections were filed later. The court analyzed the relevant provisions of the CGST Act, specifically focusing on Section 75(4), which mandates that an opportunity of hearing shall be granted when an adverse decision is contemplated against the person chargeable with tax or penalty. The court emphasized that when an adverse decision is contemplated, providing an opportunity of hearing is indispensable and must be followed scrupulously. In this case, the court found that the assessing authority confirmed the demand based on the petitioner's failure to respond to the show cause notice, which violated the mandatory provisions of Section 75(4) and principles of natural justice. Consequently, the court allowed the writ petition, setting aside the order of assessment and remanding the matter to the assessing authority for reconsideration. The court directed the assessing authority to provide a notice of hearing to the petitioner and consider the objections filed by the petitioner before passing a fresh order of assessment. The court also emphasized the importance of the petitioner's presence or authorized representative during the personal hearing. Additionally, the court clarified that the objections filed by the petitioner should be taken into consideration during the reassessment process. Finally, the court ordered no costs for the writ petition and closed any pending miscellaneous petitions in the matter.
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