2024 (3) TMI 1 - HC - GST

Violation of principles of natural justice or not - failure to afford opportunity of personal hearing - HELD THAT - Upon service of notice the petitioner had been called to file its reply only. Non compliance of that show cause notice may have only led to closure of opportunity to submit written reply. However by virtue of the express provision of Section 75 of the Act, even in that situation the petitioner did not lose its right to participate in the oral hearing and establish at that stage itself that the adverse conclusions proposed to be drawn against the petitioner, may be dropped. On merits, learned counsel for the petitioner further states that detailed reply was not required. The discrepancies in the returns as noticed by the adjudicating authority would have been clarified if opportunity of personal hearing had been granted - the petitioner's business operations are lying closed since 2020. Therefore, for reasons of disruption of business operation, petitioner committed a mistake in not responding the notice, within time. Thus, no useful purpose may be served in keeping this petition pending or calling counter affidavit at this stage or to relegate the present petitioner to the forum of alternative remedy. The order impugned has been passed contrary to the mandatory procedure. The deficiency of procedure is self apparent and critical to the out come of the proceedings - matter is remitted to the respondent No. 3 to pass a fresh order. In that regard the petitioner may file its final reply to the show cause notice within two weeks from today - petition allowed by way of remand.

Summary

Issues involved:
The issues involved in the judgment are related to the opportunity of personal hearing under section 75(4) of the U.P. G.S.T. Act, 2017, non-affording of personal hearing to the petitioner, compliance with rules of natural justice, and setting aside the impugned order due to deficiency of procedure.

Opportunity of Personal Hearing:
The judgment highlighted that section 75(4) of the U.P. G.S.T. Act, 2017 mandates the opportunity of personal hearing to be granted before any adverse decision is taken against a registered person or petitioner. It was noted that the petitioner was never afforded any opportunity of personal hearing as the notices issued did not propose to grant personal hearing, thus violating the statutory requirement.

Compliance with Rules of Natural Justice:
The court emphasized that the rules of natural justice, ingrained in the statute, prescribe a dual requirement - submission of a written reply and an oral hearing. It was clarified that failure to avail one opportunity should not lead to denial of the other, and both tests need to be satisfied independently. The petitioner's right to participate in the oral hearing and establish their case was deemed crucial, even if the written reply was not submitted.

Setting Aside the Impugned Order:
The judgment concluded that the impugned order dated 28.11.2023 was passed contrary to the mandatory procedure, and the deficiency of procedure was critical to the outcome of the proceedings. As a result, the court set aside the impugned order and remitted the matter to the respondent to pass a fresh order. The petitioner was directed to file a final reply to the show cause notice within two weeks and appear before the assessing authority for a reasoned order on 11.03.2024. The writ petition was allowed in favor of the petitioner.