2023 (8) TMI 1091 - HC - GST

Demand in excess to Rs. 26 Lacs has been raised against the present petitioner - notice in the proceedings was issued to the petitioner on 12.07.2022 seeking his reply within 15 days - grant of opportunity of hearing - HELD THAT - The view taken by the coordinate bench in Bharat Mint Allied Chemicals (supra), agreed upon - Once it has been laid down by way of a principle of law that a person/assessee is not required to request for opportunity of personal hearing and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order, the fact that the petitioner may have signified 'No' in the column meant to mark the assessee's choice to avail personal hearing, would bear no legal consequence. Even otherwise in the context of an assessment order creating heavy civil liability, observing such minimal opportunity of hearing is a must. Principle of natural justice would commend to this Court to bind the authorities to always ensure to provide such opportunity of hearing. It has to be ensured that such opportunity is granted in real terms. Here, we note, the impugned order itself has been passed on 21.03.2023, while reply to the show-cause-notice had been entertained on 30.12.2022. The stand of the assessee may remain unclear unless minimal opportunity of hearing is first granted. Only thereafter, the explanation furnished may be rejected and demand created - Not only such opportunity would ensure observance of rules of natural of justice but it would allow the authority to pass appropriate and reasoned order as may serve the interest of justice and allow a better appreciation to arise at the next/appeal stage, if required. The matter is remitted to the Respondent No.2/Assistant Commissioner, State Tax, Sector-1, Karvi, to issue a fresh notice to the petitioner within a period of two weeks from today - petition allowed.

Summary

Issues involved: Challenge to the order passed by the Deputy Commissioner for excess tax demand without affording opportunity of personal hearing as mandated by Section 75(4) of the U.P. GST Act, 2017.

Summary:

1. Background:
The matter involves a challenge to the order passed by the Deputy Commissioner, State Tax, for the tax period July 2017 to March 2018, raising a demand in excess of Rs. 26 Lacs against the petitioner.

2. Legal Ground:
The main contention in the petition is the absence of opportunity of personal hearing before passing the adverse assessment order, as the only notice issued to the petitioner was on 12.07.2022 seeking a reply within 15 days.

3. Legal Interpretation:
Referring to Section 75(4) of the U.P. GST Act, 2017, the Court relied on previous judgments to emphasize that the Assessing Authority must grant an opportunity of hearing before passing an adverse order, regardless of the assessee's choice to avail personal hearing.

4. Observations:
The Court agreed with the principle that in cases involving heavy civil liability, providing a meaningful opportunity of hearing is essential to uphold natural justice. The authorities must ensure a genuine opportunity for the assessee to present their case before making decisions that may have significant financial implications.

5. Decision:
Consequently, the writ petition was allowed, setting aside the impugned order dated 21.03.2023. The matter was remitted to the Assistant Commissioner to issue a fresh notice to the petitioner within two weeks, emphasizing the importance of conducting proceedings expeditiously while upholding principles of natural justice.

This summary provides a detailed breakdown of the legal judgment, highlighting the issues, legal interpretations, court observations, and the final decision made by the High Court in the case.