2024 (9) TMI 1401 - HC - GST

Violation of principles of natural justice - tax adjudication process under U.P. GST Act, 2017 - HELD THAT - It is found that no opportunity of personal hearing as was requested by the petitioner in his reply to the show cause notice was given to the petitioner before the impugned order has been passed. Therefore, the writ petition allowed. The impugned order dated 17.08.2022 is hereby set-aside. Since the petitioner has already given a reply to the show cause notice issued earlier, the Assessing Officer shall fix a date, time and place of hearing and give proper opportunity of personal hearing to the petitioner within a period of two weeks' from the date of certified copy of this order is produced before him.

Summary

Issues:
Violation of principles of natural justice in tax adjudication process under U.P. GST Act, 2017.

Detailed Analysis:

1. Background and Allegations:
The petitioner, engaged in Supari and Zarda packing business with a manufacturing unit in Hardoi, faced a Special Investigation Branch (SIB) Survey and subsequent tax demands based on SIB report. Despite denying liability and seeking SIB report, the respondent proceeded with tax assessment under Section 74(5) of U.P. GST Act, 2017.

2. Change of Principal Place of Business:
In response to the unfavorable assessment, the petitioner shifted the principal place of business to a new jurisdiction under the U.P. GST Act. Despite the change, the respondent issued a show cause notice without providing the SIB report or an opportunity for a personal hearing, violating principles of natural justice.

3. Legal Precedents and Compliance:
The petitioner cited legal precedents emphasizing the necessity of personal hearing under Section 75(4) of U.P. GST Act. The respondent's failure to adhere to circulars directing personal hearings and ignoring established legal principles further supported the petitioner's case.

4. Counter Arguments and Procedural Compliance:
The State-respondents contended that opportunities for personal hearings were provided before the show cause notice issuance, as evidenced by the G.S.T. portal records. However, the petitioner highlighted the lack of a specific hearing post-reply submission, as required under Section 75(4) of the Act.

5. Judicial Decision and Relief Granted:
Referring to a Co-ordinate Bench decision, the Court emphasized the importance of personal hearings and quashed the impugned order dated 17.08.2022 due to the absence of a proper hearing. The Court directed the Assessing Officer to schedule a personal hearing within two weeks and issue appropriate orders within four weeks thereafter, ensuring compliance with legal procedures and principles of natural justice.

This detailed analysis outlines the core issues of the case, including procedural irregularities, legal precedents, and the Court's decision to uphold principles of natural justice in tax adjudication under the U.P. GST Act, 2017.