2021 (9) TMI 1559 - HC - GST

Violation of principles of natural justice - Opportunity of hearing not granted adequately before passing orders - no adjournments were granted to the petitioner u/s 75 of the CGST Act, 2017 - requirement of previous authorization from the competent authority u/s 67 of the CGST Act, 2017 - HELD THAT - Section-67 of the CGST Act, 2017 requires previous authorization from the competent authority before any officer of the tax department can inspect the premises of the dealer or conduct an audit of the accounts of a dealer. In the present case, such previous authorization had already been given on 05.11.2019. The relevant provision would be Section-63 of the CGST Act, 2017 which regulates the assessment of un-registered persons - This provision authorizes the appropriate officer to assess the tax liability of any taxable person who has not obtained registration even though he is liable to obtain such registration. The language in Section-63 of the CGST Act, 2017 does not provide for any prior authorization being necessary where the assessment has been done by the proper officer. The term proper officer is defined, in Section-2 (91) of the CGST Act, 2017, to mean an officer to whom any function to be performed under this Act is assigned by the Commissioner. The territorial limit of each assessing officer is assigned by the Commissioner - the 1st respondent, being Assistant Commissioner (ST), Addanki Circle was the appropriate assessing authority and as the territorial assessing authority did not require any authorization under Section-63 of the CGST Act, 2017. Section 75(4) of the CGST Act, 2017 requires an opportunity of hearing to be given if the assessing officer contemplates an adverse decision even if the person does not make any request for such hearing. The show-cause notice dated 17.12.2019 only provides for filing written objections and no personal hearing has been granted. In the circumstances, the said assessment order would have to be set aside leaving it open to the respondents to grant such a personal hearing and to pass orders thereafter - it would not be necessary for this Court to go into the question of whether a DIN number is needed on every order or not. These Writ Petitions are disposed of setting aside the assessment order, dated 21.09.2020, as well as the penalty order, dated 09.11.2020, impugned in the present Writ Petitions while leaving it open to the 1st respondent to undertake a fresh assessment proceeding and consequential proceeding, if any, after giving an opportunity of personal hearing to the petitioner.

Summary

Issues:
- Opportunity of hearing not granted adequately before passing orders
- Compliance with Section-75 of the CGST Act, 2017 regarding adjournments
- Authorization requirement for inspection and assessment under the CGST Act, 2017
- Inclusion of DIN numbers in assessment and penalty orders

Opportunity of Hearing:
The petitioner contended that an adequate opportunity of hearing was not granted as the assessment order was passed before the petitioner could file objections. The court noted that while the show-cause notice allowed for written objections, no personal hearing was granted despite adverse decision contemplation. As per Section-75(4) of the CGST Act, 2017, a hearing must be provided in such cases. Consequently, the assessment order was set aside, allowing for a fresh assessment post a personal hearing.

Compliance with Section-75:
The petitioner argued that Section-75 of the CGST Act, 2017 mandates three adjournments before passing orders, which were not granted. The court clarified that Section-75(5) only limits the number of adjournments without specifying a minimum. As the petitioner did not seek further adjournments after the initial request, the assessment order's timing was not faulty.

Authorization Requirement:
The petitioner claimed that the assessing officer lacked proper authorization for assessment. The court examined Section-63 of the CGST Act, 2017, which allows assessment of unregistered persons by the proper officer without explicit authorization. Given the territorial reassignment, the Assistant Commissioner was deemed the appropriate assessing authority, eliminating the need for additional authorization.

Inclusion of DIN Numbers:
The petitioner raised the absence of Document Identification Number (DIN) on the orders as fatal. The court opined that while DIN numbers authenticate orders, the presence of any portal-generated number suffices for compliance. As both orders contained portal-generated numbers, substantial compliance was met.

Conclusion:
The court disposed of the writ petitions, setting aside the assessment and penalty orders. The respondents were directed to conduct fresh assessment proceedings post a personal hearing for the petitioner. No costs were awarded, and pending petitions were closed accordingly.