2022 (7) TMI 509 - HC - GST

Validity of impugned assessment order - the order has been passed rejecting the adjournment application of the petitioner, followed by rectification order - Violation of the principle of natural justice - HELD THAT - The first notice was given by the respondent no.2 to the petitioner on 15.03.2022 granting 15 days' time to submit reply with respect to the allegedly unverified transaction of Rs.3,19,22,729/-. On 30.03.2022, the petitioner submitted online adjournment application seeking 15 days' time. Undisputedly, that application was the first adjournment application of the petitioner. The cause shown for taking adjournment was not disbelieved by the respondent no.2 and, yet, the adjournment application has been rejected and liability to tax has been assessed in the impugned orders. Thus, it is evident that the impugned orders have been passed by the respondent no.2 in gross breach of principles of natural justice. The impugned assessment order under Section 74 of the UPGST Act dated 31.03.2022 and the rectification order under Section 161 of the UPGST Act dated 11.04.2022 are, hereby, quashed. The matter is remitted back to the respondent no.2 to pass a fresh order in accordance with law, after giving reasonable time to the petitioner to submit his reply and after affording reasonable opportunity of hearing to the petitioner. The writ petition is disposed of.

Summary

Issues:
Challenge to impugned orders under U.P.GST Act - Violation of natural justice - Quashing of orders - Remand for fresh assessment.

Analysis:
The petitioner filed a writ petition challenging the impugned orders passed under the U.P.GST Act for the tax period April 2018-March 2019, alleging violations of the Act and principles of natural justice. The impugned order under Section 74 of the UPGST Act, dated 31.03.2022, rejected the petitioner's adjournment application and assessed tax liability. The petitioner's first adjournment application, submitted online on 30.03.2022, was not disbelieved, yet the adjournment was denied, leading to the assessment of tax liability. The court noted that the impugned orders were passed in gross breach of natural justice principles.

The High Court found that the respondent no.2 had failed to adhere to the principles of natural justice in rejecting the adjournment application and assessing tax liability without affording the petitioner a reasonable opportunity to be heard. Consequently, the impugned assessment order under Section 74 of the UPGST Act dated 31.03.2022 and the rectification order under Section 161 dated 11.04.2022 were quashed. The matter was remitted back to the respondent no.2 for a fresh assessment in accordance with the law, with directions to provide the petitioner with reasonable time to submit a reply and an opportunity for a fair hearing.

In conclusion, the writ petition was disposed of with the direction for a fresh assessment, emphasizing the importance of following due process and principles of natural justice in tax assessments under the U.P.GST Act.