2021 (6) TMI 772 - HC - GST

Principles of natural justice - Validity of assessment order - no opportunity of hearing provided upon a revised SCN - Section 75(4) of the CGST Act - HELD THAT - A plain reading of Section 75(4) of the CGST Act would leave no doubt in one s mind that it is incumbent upon the assessing authority to give an opportunity of personal hearing to the assessee when a request in that regard is received in writing from it or where any adverse decision is contemplated against the assessee. In the present case, a clear and unequivocal prayer for personal hearing had been made by the petitioner-assessee which remained unheeded to and the impugned assessment order came to be passed. The procedure established by law, particularly, the opportunity of personal hearing was unfairly denied to the petitioner-assessee. It is trite law when a thing is prescribed to be done in a particular manner, it must be done in that manner or not at all. When the procedural breach relates to infraction of a facet of natural justice, that is, an opportunity of hearing and denial thereof prejudices the assessee to effectively respond to intricate issues of fact and law as in the present case, the impugned order is liable to be set aside on that score alone - matter remanded to the assessing authority for fresh consideration after giving an opportunity of hearing to the petitioner. Petition allowed by way of remand.

Summary

Issues:
Assessment order confirming CGST amount due to failure to file GSTR-3B inclusive of penalty and interest - Breach of principles of natural justice - Opportunity of personal hearing denied - Compliance with Section 75(4) of the CGST Act required.

Analysis:
The petitioner, an assessee, challenged the assessment order passed by the 1st respondent confirming a CGST amount on taxable supply declared in GSTR-I for the year 2019-20 due to failure to file GSTR-3B along with penalty and interest. The petitioner contended that no opportunity of hearing was provided despite a revised show-cause notice, citing a decision of the Gujarat High Court in support. The Government Pleader argued that a hearing was extended upon issuance of the initial notice, which the petitioner did not insist upon during the revised notice. However, the petitioner disputed this claim. The Court examined the records and noted a clear demand for a personal hearing, emphasizing the importance of Section 75(4) of the CGST Act in granting such an opportunity.

The Court highlighted that Section 75(4) mandates granting an opportunity of hearing upon a written request from the person chargeable with tax or penalty or when an adverse decision is contemplated against them. In this case, the petitioner had clearly requested a personal hearing, which was disregarded leading to the passing of the impugned assessment order. The Court emphasized that procedural requirements, especially regarding natural justice like the opportunity of hearing, must be strictly adhered to. Denial of such an opportunity hinders the assessee from effectively responding to complex factual and legal issues, necessitating the setting aside of the assessment order.

Consequently, the Court allowed the Writ Petition, setting aside the assessment order and remanding the matter to the assessing authority for fresh consideration after providing a personal hearing to the petitioner. The assessing authority was directed to pass an appropriate order within two months from the date of the Court's communication, with a restriction on unnecessary adjournments. The Court clarified that it did not delve into the merits of the case, leaving other issues raised in the writ petition open for independent consideration by the assessing authority in accordance with the law. No costs were awarded, and any pending Miscellaneous Petitions related to the Writ Petition were to be closed as a result of the judgment.