2021 (8) TMI 306 - HC - GST

Principles of natural justice - validity of assessment order - no notice of personal hearing was issued before resorting to the impugned action - non-adherence to the mandatory provisions of sub-section (4) of Section 75 of the Central Goods and Services Tax Act, 2017 - HELD THAT - In order to adjudicate the issue in the present Writ Petition, it may be appropriate to refer to Section 75 of the CGST Act, 2017, which deals with the general provisions relating to determination of tax. According to sub-section (4) of Section 75 of the Act, an opportunity of hearing should be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person - In the instant case, though the petitioner herein submitted his reply to the notice issued by 2nd respondent prior to passing the impugned order, the Assessing Authority, while referring to the objections raised therein, simply stated that they were not considered, and eventually, determined the liability as proposed in the show cause notice. In the considered opinion of this Court, 2nd respondent herein, before doing so, ought to have afforded an opportunity of hearing to the assessee, as mandated under sub-section (4) of Section 75 of the CGST Act, 2017. In the case on hand, 2nd respondent adhered to the said provision of law in breach. The said action is also a patent violation of principles of natural justice, as such, the contention of the learned Government Pleader as regards the availability of alternative remedy of appeal under Section 107 of the CGST Act, 2017, deserves to be rejected and is, accordingly, rejected. Matter remanded to 2 nd respondent for consideration of the issue afresh after affording opportunity of hearing to the petitioner - petition allowed by way of remand.

Summary

Issues:
Challenge to assessment order based on lack of personal hearing notice.

Analysis:
The High Court of Andhra Pradesh heard the case concerning the challenge to an assessment order passed by the Assistant Commissioner (State Tax). The main issue was whether the order of assessment could be set aside due to the absence of a notice for a personal hearing before taking the impugned action. The petitioner argued that the failure to adhere to the mandatory provisions of sub-section (4) of Section 75 of the Central Goods and Services Tax Act, 2017 was fatal to the case of the respondents. On the other hand, the Government Pleader contended that since there was an alternative remedy of appeal under Section 107 of the CGST Act, the writ petition should be rejected.

The petitioner, a registered civil contractor undertaking government works in the Water Resources Department of the Government of Andhra Pradesh, received a notice and submitted a reply before the Assessing Authority passed the impugned order of assessment. The Court referred to Section 75 of the CGST Act, 2017, which requires granting an opportunity of hearing when a request is received in writing from the person chargeable with tax or penalty, or when any adverse decision is contemplated. Despite the petitioner submitting a reply, the Assessing Authority did not consider the objections raised and determined the liability as proposed in the show cause notice. The Court found that the Assessing Authority should have afforded an opportunity of hearing to the assessee as mandated under sub-section (4) of Section 75 of the CGST Act, 2017. The Court concluded that the failure to adhere to this provision and the violation of principles of natural justice warranted setting aside the impugned order and remanding the matter to the Assessing Authority for fresh consideration.

Therefore, the High Court allowed the writ petition, setting aside the order of assessment and remanding the matter to the Assessing Authority for reconsideration after providing an opportunity of hearing to the petitioner. The Court made no order as to costs of the writ petition, and any pending miscellaneous petitions in the matter were to be closed.