2022 (9) TMI 606 - HC - GST

Validity of SCN - Jurisdiction - issuance of intimation prior to issuance of show cause notice to an assessee by the Proper Officer - opportunity of hearing not granted - it is alleged that the respondent-authority treated the information/intimation under Section 74 (5) of the Act to be show cause notice which is not legal - violation of principles of natural justice - HELD THAT - It appears that admittedly; no opportunity of personal hearing has been granted to the petitioner and he was also not given the relied upon documents. In the instant case on 25.02.2020 DRC-01 A (intimation of tax) DRC-02 (Summary of Statement) and intimation of liability under Section 74 (5) of the Act was issued on the same date i.e. 25.02.2020, thereafter, on 04.06.2020 summary of show cause notice in the form of DRC-01 along with show cause notice was issued, fixing the date as 03.07.2020 for filing reply and thereafter, without giving any opportunity of hearing and without fixing any date for hearing adjudication order has been passed on 06.07.2020 - Here lies the lacuna committed by the respondents in non-compliance of the statutory provisions of the JGST Act and also the settled principles of natural justice. Admittedly; prior to passing of adjudication order, no notice of personal hearing as required under Section 75 (4) and 75 (5) was given to the petitioner which is against the provision of law. Since opportunity of personal hearing was not given to the petitioner; interest of justice demands that the matter should be remitted back to the authority for compliance of the necessary provision of the Act - Petition allowed by way of remand.

Summary

Issues:
1. Quashing of show cause notices and orders under JGST Act.
2. Lack of opportunity of personal hearing and violation of natural justice principles.

Analysis:

Issue 1: Quashing of show cause notices and orders under JGST Act
The petitioner sought relief for quashing show cause notices and orders issued by Respondent No.4 under the Jharkhand Goods & Service Tax Act, 2017. The petitioner alleged that the respondent pre-judged and pre-decided the issues, passing orders fastening tax liabilities without granting an opportunity for a fair hearing. The petitioner contended that the notices and orders were issued in violation of statutory provisions and principles of natural justice. The court observed that no opportunity for personal hearing was provided to the petitioner, which was a clear violation of the law. The court referred to previous judgments emphasizing the importance of personal hearing in such cases. Consequently, the court quashed the adjudication order and remitted the matter back to the authority for compliance with the necessary provisions of the Act, ensuring a fair hearing and adherence to natural justice principles.

Issue 2: Lack of opportunity of personal hearing and violation of natural justice principles
The petitioner's counsel argued that the impugned adjudication order lacked an opportunity for personal hearing, which deprived the petitioner of the chance to present relied upon documents and defend their case effectively. The counsel cited a recent judgment by the court regarding the necessity of personal hearings in such matters. The respondent, in a counter-affidavit, admitted the lack of personal hearing but suggested that the petitioner had opportunities to submit documents and failed to do so. However, the court emphasized that the absence of a formal notice for personal hearing, as required by the law, was a significant violation. The court highlighted the importance of providing a fair opportunity for a personal hearing as mandated by the JGST Act and principles of natural justice. Consequently, the court allowed the writ application, quashed the adjudication order, and directed the authority to issue a fresh notice for a personal hearing, ensuring compliance with legal provisions and fair treatment of the petitioner.

In conclusion, the judgment by the Jharkhand High Court focused on the quashing of show cause notices and orders under the JGST Act due to the lack of opportunity for personal hearing and violations of natural justice principles. The court's decision to remit the matter back to the authority for a fresh hearing underscores the importance of procedural fairness and adherence to legal requirements in tax adjudication matters.