2024 (12) TMI 215 - HC - GST

Challenge to assessment order - opportunity of hearing not provided - violation of principles of natural justice - HELD THAT - A bare look at the show-cause notice issued to the petitioner itself reveals that the Assessing Authority had no intention to afford any opportunity of hearing as in the column pertaining to personal hearing, as noticed hereinbefore, 'NA' has been indicated. However, as from DRC-06 provided for a column pertaining to the personal hearing, wherein the petitioner specifically marked 'Yes' and also made a prayer in reply to the show-cause notice for affording opportunity of personal hearing, it was incumbent upon the authorities to provide an opportunity of hearing. However, apparently on 06.08.2024 itself, the order has been passed, which ex facie, is against the principles of natural justice. The plea raised pertaining to the fact that the opportunity was granted to the petitioner, the indications made in the show-cause notice cannot and does not pertain to any opportunity after filing of the reply and demanding the opportunity of hearing. Any previous opportunity, i.e., prior to the issuance of show-cause notice, is of no consequence - So far as the fact that the limitation for passing the assessment was expiring, that also cannot be a reason for not affording opportunity of hearing to the party, may be that a short date could have been fixed by the authority for that purpose. The assessment made by order dated 06.08.2024 (Annexure-8) cannot be sustained. The same is, therefore, quashed and set aside leaving it open to the authorities to pass a fresh order after affording opportunity of hearing to the petitioner - Petition allowed.

Summary

Issues:
Violation of principles of natural justice in passing assessment order without affording opportunity of hearing.

Analysis:
The writ petition challenged an order passed under Section 73 of U.P.G.S.T./C.G.S.T. Act, 2017 for the financial year 2019-20. The petitioner contended that despite indicating a desire for a personal hearing and specifically requesting an opportunity for the same in the reply to the show-cause notice, the assessment order was issued on the same day as the reply without any hearing. The petitioner argued that this violated principles of natural justice. The court noted that the show-cause notice itself did not provide for a personal hearing, but the petitioner had requested one in their reply. The court emphasized that the authorities were obligated to provide an opportunity for a hearing once it was requested, regardless of any previous opportunities. The court held that passing the assessment order on the same day as the reply, without a hearing, was against natural justice principles.

The government counsel argued that the petitioner had been given several opportunities, but the petitioner's response to the show-cause notice was inadequate, and the assessment order was passed as the limitation for assessment was expiring. The court, however, rejected this argument, stating that the expiry of the assessment limitation period was not a valid reason to deny a hearing. The court emphasized that even if time was a constraint, a short date could have been fixed for a hearing. The court concluded that the assessment order passed on the same day as the reply, without a hearing, could not be sustained.

As a result, the court quashed and set aside the assessment order dated 06.08.2024, directing the authorities to pass a fresh order after affording the petitioner an opportunity for a hearing. The court instructed the petitioner to appear before the authority on a specified date without the need for a fresh notice. The writ petition was allowed based on the above directions and observations.