2024 (7) TMI 909 - HC - GST

Violation of principles of natural justice - opportunity of personal hearing not provided - HELD THAT - Upon service of notice the petitioner had been called to file its reply only. Consequently, 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 at 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. 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. Matter is remitted to the respondent No. 2 to pass a fresh order - petition allowed by way of remand.

Summary

Issues:
Opportunity of personal hearing under section 75(4) of the U.P. G.S.T. Act, 2017 not granted to the petitioner.

Analysis:
The judgment delivered by the Hon'ble Court focused on the issue of the petitioner not being afforded the opportunity of personal hearing as mandated under section 75(4) of the U.P. G.S.T. Act, 2017. The Court noted that the notice issued to the petitioner did not propose to grant personal hearing, as indicated by the abbreviation "NA" against the relevant columns. It was observed that the petitioner was only called to file a written reply, and the lack of personal hearing opportunity could have led to the closure of the chance to submit a written reply. However, the Court emphasized that even in such a situation, the petitioner should have the right to participate in an oral hearing to contest adverse conclusions.

Furthermore, the judgment highlighted the importance of adhering to the principles of natural justice ingrained in the statute, which require both written reply submission and oral hearing to be independently satisfied. The Court emphasized that failure to avail one opportunity should not result in the denial of the other. The petitioner's counsel argued that a detailed reply was not necessary, and any discrepancies in the returns could have been clarified if a personal hearing opportunity had been granted.

In conclusion, the Court found that the impugned order had been passed contrary to the mandatory procedure, leading to a deficiency in the proceedings' outcome. As a result, the Court set aside the impugned order dated 30.06.2023 and remitted the matter to the respondent to pass a fresh order. The petitioner was directed to file a final reply to the show cause notice within two weeks and appear before the assessing authority on a specified date for further proceedings. The writ petition was allowed in favor of the petitioner, emphasizing the critical importance of providing a fair opportunity for personal hearing in such cases.