2021 (6) TMI 373 - HC - VAT and Sales Tax

Principles of Natural Justice - cancellation of registration of petitioner - composition taxpayer has not filed returns for a continuous period of six months - HELD THAT - Though the petitioner has failed to file any reply, before passing the impugned order, the respondent should have called the petitioner for a personal hearing either in person or through video conferencing. As no hearing was held prima-facie, the interim order is liable to be interfered. Therefore, there shall be an interim stay as prayed for till four weeks. Notice to the respondent returnable in four weeks - Post the matter after four weeks.

Summary

Issues: Challenge to impugned order based on principles of natural justice.

The judgment delivered by the High Court pertains to a writ petition challenging an order passed by the respondent on 30.10.2019. The petitioner argued that the impugned order was issued without following the principles of natural justice. The respondent had issued a show cause notice to the petitioner citing reasons for possible cancellation of registration due to non-filing of returns for a continuous period of six months by a taxpayer other than a composition taxpayer. The notice directed the petitioner to respond within seven working days. However, the petitioner did not submit a reply. The court noted that before passing the order, the respondent should have provided an opportunity for a personal hearing to the petitioner, either in person or through video conferencing. As no such hearing took place, the court found that the interim order was subject to interference. Consequently, an interim stay was granted for four weeks, and the respondent was given notice to appear after the specified period.

The primary issue in this case revolved around the adherence to the principles of natural justice by the respondent while passing the impugned order. The court emphasized the importance of providing an opportunity for a personal hearing to the petitioner before making a decision based on the available records. The failure to conduct a hearing was considered a violation of natural justice, leading to the court granting an interim stay on the order. This case underscores the significance of procedural fairness and the right to be heard in administrative proceedings, highlighting the necessity for authorities to afford individuals a chance to present their case before taking adverse actions. The judgment serves as a reminder of the fundamental principles that govern administrative decision-making and the need for procedural regularity to ensure fairness and transparency in such processes.