2024 (7) TMI 236 - HC - GST

Violation of principles of natural justice - complete denial of opportunity of oral hearing before the Assessing Authority - HELD THAT - 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. Even otherwise in the context of an assessment order creating heavy civil liability, observing such minimal opportunity of hearing is a must. 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 - The stand of the assessee may remain unclear unless minimal opportunity of hearing is first granted. Only thereafter, the explanation furnished may be rejected and demand created. The matter is remitted to the respondent no.2/Assistant Commissioner, State Tax, Sector - 1, Pratapgarh, Prayagraj to issue a fresh notice to the petitioner within a period of two weeks from today - petition disposed off by way of remand.

Summary

Issues:
Challenge to order raising tax demand without affording opportunity of oral hearing to the petitioner.

Analysis:
The judgment involves a challenge to an order passed by the Assistant Commissioner, State Tax, raising a tax demand against the petitioner for the tax period 2017-18. The petitioner's counsel argued that the petitioner was denied the opportunity of oral hearing before the Assessing Authority, which is a violation of Section 75(4) of the U.P. GST Act, 2017. The petitioner relied on previous court decisions to support the claim that the Assessing Authority was obligated to provide a personal hearing before passing an adverse assessment order.

The respondent's counsel contended that the petitioner had declined the opportunity of hearing by selecting 'No' in the online reply to the show-cause notice. However, the court agreed with the petitioner's argument, emphasizing that the Assessing Authority must provide an opportunity of personal hearing as mandated by law, regardless of the petitioner's initial choice to decline the hearing.

The court highlighted the importance of granting a fair hearing, especially in cases involving significant civil liabilities. It stressed that the principles of natural justice require authorities to ensure that adequate opportunities for hearing are provided to parties involved. The court noted that the impugned order was passed without giving the petitioner a proper chance to present their case, which could lead to misunderstandings and unjust outcomes.

In conclusion, the court set aside the order dated 07.12.2023 and directed the matter to be remitted back to the Assistant Commissioner to issue a fresh notice to the petitioner within two weeks. The petitioner was instructed to appear before the authority to ensure expeditious proceedings with due regard to the principles of natural justice and fair hearing.