2024 (10) TMI 119 - HC - GST

Challenge to assessment order and summary of assessment order - violation of the principles of natural justice, specifically provided under the provisions of Section 75 (4) of Kerala State Goods and Services Tax Act, 2017 - HELD THAT - The provisions of Section 75 (4) specifically provided that prior to completion of assessment, an opportunity for hearing is to be extended, when the assessee makes a specific request in that regard in writing before the assessing authority. In the case at hand, the fact that such a request is made by the petitioner is not in dispute. Furthermore, the show cause notice which culminated in the assessment order has created a demand in excess of Rs. 30,00,000/-. Section 75 (4) mandates an opportunity of hearing when any adverse decision is contemplated against an assessee. Insofar as a demand in excess of Rs. 30,00,000/- is created against the petitioner, it was incumbent on the part of the second respondent to have provided the petitioner a reasonable opportunity for personal hearing. Insofar as there is no evidence to prove that the notice fixing the hearing on 16.04.2024 was actually served on the petitioner, there are no reason to sustain the order at Ext. P6. This writ petition is allowed, by quashing Ext. P6 assessment order issued by the second respondent herein. The second respondent would issue a fresh notice, intimating the petitioner as regards the opportunity for personal hearing, under the provisions of Section 75 (4).

Summary

Issues:
1. Violation of principles of natural justice in assessment order issuance.

Detailed Analysis:
The petitioner, an assessee under the Central Goods and Services Tax Act, challenged the assessment order and summary of assessment order issued by the second respondent, alleging a violation of natural justice principles under Section 75(4) of the Act. The petitioner filed a writ petition seeking to quash the assessment orders and requested a fresh assessment with proper verification and hearing opportunity.

The petitioner had initially filed a return for the assessment year 2018-19 and received a show-cause notice from the second respondent. Despite submitting a reply and engaging in email communications, the second respondent issued an ex-parte assessment order, claiming that a personal hearing opportunity was provided on a specific date. The petitioner later filed an application for rectification, highlighting errors in the assessment order due to lack of appearance opportunity.

During the hearing, the petitioner's counsel argued that the assessment order was invalid as it did not comply with Section 75(4) requirements. The counsel pointed out discrepancies in the notice dates and emphasized the importance of natural justice principles, citing relevant case law to support the argument.

On the other hand, the Government Pleader contended that the petitioner had prior knowledge of the assessment proceedings and had been granted personal hearing opportunities before. However, the court noted that the notice dates and service of hearing intimation were crucial in ensuring procedural fairness.

After considering the submissions and records, the court found that the petitioner was justified in expecting a fresh hearing notice due to discrepancies in the dates mentioned in the assessment process. Since the petitioner was entitled to a hearing opportunity, especially for cases involving substantial demands, the court concluded that the assessment order was unsustainable due to lack of evidence of proper notice service.

Ultimately, the court allowed the writ petition, quashing the assessment order and directing the second respondent to issue a fresh notice for a proper hearing in accordance with Section 75(4) requirements.