2022 (4) TMI 350 - HC - GST

Maintainability of petition - availability of alternative remedy of appeal - time limitation - opportunity of hearing provided or not - Violation of of principles of natural justice - HELD THAT - It is very much evident that an opportunity of hearing is required to be given where a request was made in writing to the person chargeable with taxes and penalty or where any adverse decision is contemplated against such person. Therefore, when the authority contemplates to pass an adverse order against any assessee, an opportunity of hearing is required to be given. Failure to do so amounts to violation of principles of natural justice. In the instant case, admittedly no notice was given to the petitioner before contemplating to pass an adverse order. Such a course of caution is prejudicial to the interest of assessee and the same would be in violation of Sub-Section (4) of Section 75 of C.G.S.T. Act, 2017. The matter to respondent no.1 for consideration of the issues and for passing appropriate orders in accordance with law afresh after giving notice of hearing to the petitioner - Petition allowed by way of remand.

Summary

Issues: Violation of principles of natural justice in assessment order under A.P.G.S.T. Act, 2017. Delay in approaching the court due to pandemic. Opportunity of hearing as per Sub-Section (4) of Section 75 of the Act.

Violation of Principles of Natural Justice in Assessment Order:
The petitioner challenged the Assessment Order and Rectification Order passed under the A.P.G.S.T. Act, 2017, alleging a violation of natural justice principles. The petitioner contended that no opportunity of hearing was granted before the adverse orders were passed. The court emphasized that under Sub-Section (4) of Section 75 of the Act, an opportunity of hearing must be provided when an adverse decision is contemplated against the person chargeable with taxes and penalties. The court held that the failure to provide such a hearing amounted to a violation of natural justice. Consequently, the court set aside the Assessment Order and the Rectification Order, remanding the matter back to the authority for reconsideration after granting a proper notice of hearing to the petitioner.

Delay in Approaching the Court Due to Pandemic:
The respondent argued that the petitioner approached the court with delay, as the orders were passed in July 2020, but the Writ Petition was filed in October 2021. The petitioner attributed the delay to the pandemic situation, which hindered the timely pursuit of legal remedies. The court acknowledged the delay but considered the exceptional circumstances of the pandemic and the extensions of limitation periods by the Supreme Court. The court accepted the explanation provided by the petitioner and allowed the Writ Petition, emphasizing that the delay in approaching the court was justified under the prevailing circumstances.

Opportunity of Hearing as per Sub-Section (4) of Section 75 of the Act:
The court reiterated the importance of granting an opportunity of hearing as mandated by Sub-Section (4) of Section 75 of the Act. This provision requires that a person chargeable with tax or penalty must be given an opportunity of hearing when an adverse decision is contemplated against them. The court emphasized that the failure to provide such an opportunity is a violation of natural justice. In this case, since no notice of hearing was given to the petitioner before passing the adverse order, the court concluded that the principles of natural justice were breached. As a result, the court directed the authority to conduct a fresh consideration of the issues after granting a notice of hearing to the petitioner, ensuring compliance with the legal provisions.

In conclusion, the High Court of Andhra Pradesh, in a judgment delivered by Hon'ble Sri Justice C. Praveen Kumar and Hon'ble Smt. Justice V. Sujatha, addressed the issues of violation of natural justice in the assessment order, the delay in approaching the court due to the pandemic, and the necessity of providing an opportunity of hearing as per the relevant legal provisions. The court upheld the importance of procedural fairness and granted relief to the petitioner by setting aside the Assessment Order and directing a reconsideration with proper notice of hearing, while also considering the exceptional circumstances leading to the delay in approaching the court.