2024 (4) TMI 420 - HC - GST

Principles of natural justice - ex-parte order dated 30.09.2023 issued by Commercial Tax Officer, Sector-4, Ghaziabad, Uttar Pradesh - petitioner was never afforded any 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 - the rules of natural justice as are ingrained in the statute prescribe dual requirement. First with respect to submission of written reply and the second with respect to oral hearing. Failure to avail one opportunity may not lead to denial of the other. The two tests have to be satisfied independently. 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. 2 to pass a fresh order. Petition allowed by way of remand.

Summary

Issues involved: Challenge to ex-parte order u/s 73 of Uttar Pradesh Goods and Services Tax Act, 2017 for lack of opportunity of personal hearing.

Summary:

Issue 1: Lack of opportunity of personal hearing

The challenge was raised against the ex-parte order dated 30.09.2023 issued by the Commercial Tax Officer, Sector-4, Ghaziabad, Uttar Pradesh, as the petitioner was not afforded any opportunity of personal hearing. The first notice under Section 73 of the Act did not propose to grant personal hearing, as "NA" was specified against the column for the date of personal hearing. The petitioner was only called to file its reply, and non-compliance could have led to closure of the opportunity to submit a written reply. However, as per Section 75 of the Act, the petitioner did not lose the right to participate in the oral hearing even if the written reply was not submitted. The rules of natural justice require both written and oral hearings, and failure to avail one opportunity should not lead to denial of the other.

Issue 2: Merits of the case

The petitioner's counsel argued that a detailed reply was not required, and any discrepancies in the returns could have been clarified if a personal hearing had been granted. It was mentioned that the petitioner's business operations had been closed since 2020, which led to the mistake of not responding to the notice in time. The Court found that the impugned order was passed contrary to the mandatory procedure, and the deficiency of procedure was critical to the outcome of the proceedings.

Judgement

The High Court set aside the impugned order dated 30.12.2023 and remitted the matter to the respondent No. 2 to pass a fresh order. The petitioner was directed to file its final reply to the show cause notice within two weeks and appear before the Assessing Authority on 06.05.2024. The Assessing Authority was instructed to pass an appropriate reasoned order after the petitioner's appearance. Consequently, the writ petition was allowed.