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2024 (3) TMI 394 - HC - GSTValidity of notice issued to the petitioner - petitioner was completely denied opportunity of oral hearing before the Assessing Authority - violation of principles of natural justice - HELD THAT - Relying on Section 75(4) of the U.P. GST Act, 2017 as interpreted by a coordinate bench of this Court in Bharat Mint Allied Chemicals Vs. Commissioner Commercial Tax 2 Ors., 2022 (3) TMI 492 - ALLAHABAD HIGH COURT , it has been then asserted, the Assessing Authority was bound to afford opportunity of personal hearing to the petitioner before he may have passed an adverse assessment order. Insofar as the assessment order has raised disputed demand of tax about Rs. 19 lacs, the same is wholly adverse to the petitioner. In absence of opportunity of hearing afforded, the same is contrary to the law declared by this Court in Bharat Mint Allied Chemicals. There are complete agreement with the view taken by the coordinate bench in Bharat Mint Allied Chemicals. Once it has been laid down by way of a principle of law that a person/assessee is not required to request for opportunity of personal hearing and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order, the fact that the petitioner may have signified 'No' in the column meant to mark the assessee's choice to avail personal hearing, would bear no legal consequence. Principle of natural justice would commend to this Court to bind the authorities to always ensure to provide such opportunity of hearing. It has to be ensured that such opportunity is granted in real terms - Not only such opportunity would ensure observance of rules of natural of justice but it would allow the authority to pass appropriate and reasoned order as may serve the interest of justice and allow a better appreciation to arise at the next/appeal stage, if required. The matter is remitted to the respondent no.2/Deputy Commissioner, State Tax, Sector-14, Lucknow to issue a fresh notice to the petitioner within a period of two weeks from today - petition allowed by way of remand.
Issues involved:
Challenge to order passed by Deputy Commissioner for excess tax demand; Denial of opportunity of oral hearing before Assessing Authority. Issue 1: Challenge to order passed by Deputy Commissioner for excess tax demand The petitioner challenged the order passed by the Deputy Commissioner, State Tax, Lucknow for the tax period 2021-22, raising a demand in excess of Rs. 4,51,52,992. The main contention was that the petitioner was denied the opportunity of oral hearing before the Assessing Authority, as the notice issued did not provide for a personal hearing. The petitioner argued that as per Section 75(4) of the U.P. GST Act, 2017, the Assessing Authority was obligated to afford an opportunity of personal hearing before passing an adverse assessment order. Issue 2: Denial of opportunity of oral hearing before Assessing Authority The petitioner contended that the Assessing Authority's failure to provide an opportunity of personal hearing was in violation of the law. Citing a previous decision by a coordinate bench of the Court and a judgment of the Gujarat High Court, the petitioner argued that the principle of natural justice required the authority to grant a personal hearing, especially in cases involving substantial tax liabilities. The Court agreed with the petitioner's argument, emphasizing that the Assessing Authority must ensure that such opportunities are granted in reality, not just in formality. The Court held that providing a personal hearing not only upholds the principles of natural justice but also allows for a more informed and just decision-making process. Conclusion: The Court allowed the writ petition, setting aside the impugned order dated 26.07.2021 and remitting the matter back to the Deputy Commissioner, State Tax, Lucknow. The Deputy Commissioner was directed to issue a fresh notice to the petitioner within two weeks, ensuring that the petitioner is given a proper opportunity for a personal hearing before any further proceedings take place.
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