2023 (10) TMI 217 - HC - GST

Maintainability of petition - availability of alternative remedy - Violation of principles of natural justice - non-affording of personal hearing to the petitioner - HELD THAT - The show cause notice dated 22.07.2022 (Annexure P/5) issued under Section 74 of the Act, itself shows that before passing final order dated 24.08.2022 (Annexure P/6), the intention of the respondents was to give personal hearing to the petitioner as required under the law, but in the table given below, captioned as Details of personal hearing etc. , no Date, Time and Venue of personal hearing has been shown and in front of columns 3,4 5 of Date, Time and Venue, NA has been mentioned, which is sufficient to infer that no personal hearing was given to the petitioner before passing the impugned order dated 24.08.2022. Availability of alternative remedy of appeal - HELD THAT - It is well settled that when due opportunity of hearing, as required under the law, has not been afforded and principle of natural justice has not been followed, then the question of availability of alternative remedy does not come in the way for exercising jurisdiction under Article 226 of the Constitution of India. The matter is remitted back to the Deputy Commissioner, Audit Wing, Jabalpur for passing order afresh, after giving personal hearing to the petitioner - Petition allowed.

Summary

Issues Involved:
Challenge to order under section 74 of MPSGST/CGST Act, 2017 and section 20 of IGST Act, 2017 for upholding tax, interest, and penalty mentioned in the show cause notice.

Issue 1: Opportunity of Personal Hearing
The petitioner challenged the order dated 24.08.2022 for lack of personal hearing, as required under Section 75(4) of the Act. The show cause notice mentioned a personal hearing but did not specify the date, time, and venue. The petitioner argued that personal hearing is mandatory before passing such orders, citing the Allahabad High Court decision in Bharat Mint & Allied Chemicals Vs. Commissioner of Commercial Tax. The court observed that Section 75(4) mandates granting a hearing when an adverse decision is contemplated, even without a request. The absence of a specified personal hearing rendered the impugned order unsustainable.

Issue 2: Alternative Remedy of Appeal
The respondents defended the order but failed to justify the lack of personal hearing. They suggested the petitioner pursue an appeal instead. However, the court noted that the availability of an alternative remedy does not negate the need for due process and natural justice. In light of the absence of a proper hearing, the court relied on the Allahabad High Court decision to quash the impugned order and remit the matter for a fresh order after affording the petitioner a proper personal hearing.

This judgment highlights the importance of adhering to procedural requirements, particularly regarding personal hearings, in administrative decisions under the GST Acts. The court's decision emphasizes the significance of providing a fair opportunity for parties to present their case before adverse orders are passed, in line with principles of natural justice and statutory provisions.