2022 (2) TMI 350 - HC - GST

Violation of the principles of natural Justice - impugned assessment order creating demand of tax, interest and penalty, has been passed without affording opportunity of hearing - Section 75(4) of the Central Goods and Services Tax, 2017/ U.P. Goods and Services Tax, 2017 - HELD THAT - From perusal of Section 75(4) of the Act, it is evident that opportunity of hearing has to be granted by authorities under the Act where either a request is received from the person chargeable with tax or penalty for opportunity of hearing or where any adverse decision is contemplated against such person. Thus, it prima facie , appears that where an adverse decision is contemplated against the person, such a person even need not to request for opportunity of hearing and it appears to be mandatory for the authority concerned to afford opportunity of hearing before passing an order adverse to such person. From perusal of the impugned order, it, prima facie , appears that the provisions of Section 75(4) of the Act, have not been complied with. Section 75(4) is reiteration of principles of natural justice. Put up as a fresh case before the appropriate bench on 11.02.2022, along with records of Writ Tax No.1037 of 2021.

Summary

Issues:
Violation of principles of natural justice in passing an assessment order without affording an opportunity of hearing as per Section 75(4) of the GST Act.

Detailed Analysis:

The petitioner filed a writ petition seeking relief through a writ of certiorari to set aside the impugned order of adjudication dated 09.11.2021, highlighting a gross violation of natural justice principles. The petitioner's counsel argued that the assessment order creating tax demand was passed without providing the opportunity of hearing as mandated by Section 75(4) of the Central Goods and Services Tax Act, 2017. The counsel contended that the order was unsustainable and should be quashed due to the lack of a fair trial.

Upon examining the show cause notice dated 09.09.2021, it was noted that while the notice mentioned the opportunity for a personal hearing, the specific date, time, and venue were not provided. Section 75(4) of the Act requires granting an opportunity of hearing upon a written request from the person chargeable with tax or penalty or when an adverse decision is anticipated. The court observed that the provision makes it mandatory for authorities to afford an opportunity of hearing before passing an adverse order against the concerned person, even if no explicit request is made.

The court found that the impugned order did not comply with the provisions of Section 75(4) of the Act, indicating a failure to adhere to the principles of natural justice. Consequently, the court directed the respondents to file a counter affidavit within a week, specifically addressing whether the petitioner was provided with the opportunity of hearing as required by the Act. The case was scheduled for further proceedings on 11.02.2022, with an interim order preventing any coercive action against the petitioner based on the demand created by the impugned order until the next hearing date.