2024 (4) TMI 275 - HC - GST

Principles of natural justice - Gross violation of Section 75(4) of the Central Act - no order may have been passed during pendency of earlier writ petition filed by the petitioner pertaining to rectification of GSTR-I - Section 11 of the Goods and Services Tax (Compensation to States) Act, 2017 read with the provision of Central Goods and Services Tax Act, 2017 - HELD THAT - In MAHAVEER TRADING COMPANY VERSUS DEPUTY COMMISSIONER STATE TAX AND ANOTHER 2024 (3) TMI 334 - ALLAHABAD HIGH COURT the fact of violation of Section 75(4) of the State Act is considered. Therein, it was held that In view of the facts noted above, before any adverse order passed in an adjudication proceeding, personal hearing must be offered to the noticee. If the noticee chooses to waive that right, occasion may arise with the adjudicating authority, (in those facts), to proceed to deal with the case on merits, ex-parte. Also, another situation may exist where even after grant of such opportunity of personal hearing, the noticee fails to avail the same. Leaving such situations apart, we cannot allow a practice to arise or exist where opportunity of personal hearing may be denied to a person facing adjudication proceedings. For the same reason, the impugned order cannot be sustained. It is set set aside. The writ petition is allowed.

Summary

Issues Involved: Challenge to the order dated 23.12.2023 passed under Section 73(9) of the Uttar Pradesh Goods and Service Tax Act, 2017.

Violation of Section 11 of the Goods and Services Tax (Compensation to States) Act, 2017:
The petitioner contended that no order should have been passed under the provisions of the State Act as per Section 11 of the Central Goods and Services Tax Act, 2017. It was argued that the impugned order was unsustainable due to a gross violation of Section 75(4) of the Central Act, where the petitioner was not provided with a proper opportunity for a personal hearing as required by law.

Violation of Principles of Natural Justice:
The petitioner raised objections regarding the impugned order being passed during the pendency of an earlier writ petition and the lack of adherence to principles of natural justice. It was highlighted that the notice preceding the impugned order did not provide adequate details for the petitioner to exercise their right to reply in accordance with the law. The Court acknowledged the violation of principles of natural justice as incorporated in Section 75(4) of the Central Act and the State Act.

Adjudication without Proper Opportunity of Personal Hearing:
The Court noted that the impugned order was passed without granting the petitioner a proper opportunity for a personal hearing, which is essential for fair adjudication proceedings. It was emphasized that before any adverse order is passed, a personal hearing must be offered to the noticee, and the denial of such an opportunity goes against fundamental principles of natural justice. The Court found the impugned order to be in violation of these principles and set it aside.

Conclusion:
The High Court allowed the writ petition, setting aside the impugned order due to violations of fundamental principles of natural justice. The petitioner was given the option to raise objections before the respondent-authority in accordance with the law, and any objections raised would be considered on their own merits by a reasoned and speaking order.