2023 (10) TMI 343 - HC - GST

Principles of natural justice - only notice in the proceedings was issued to the petitioner seeking his reply within 30 days - denial of opportunity of oral hearing before the Assessing Authority - HELD THAT - There are complete agreement with the view taken by the coordinate bench in BHARAT MINT AND ALLIED CHEMICALS VERSUS COMMISSIONER COMMERCIAL TAX AND 2 OTHERS 2022 (3) TMI 492 - ALLAHABAD HIGH COURT . 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. The impugned order itself has been passed on 06.12.2022. 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/Deputy Commissioner, State Tax, Sector-1, Raebareli to issue a fresh notice to the petitioner within a period of two weeks from today - Petition allowed by way of remand.

Summary

Issues involved:
Challenge to order passed by Deputy Commissioner, State Tax for tax period 2018-19 due to lack of opportunity of oral hearing before Assessing Authority.

Summary:
The petitioner challenged an order passed by the Deputy Commissioner, State Tax, for the tax period 2018-19, raising a demand in excess of Rs. 27,23,636. The main contention was the denial of an opportunity of oral hearing before the Assessing Authority, as the notice issued to the petitioner did not provide for a personal hearing. The petitioner argued that under Section 75(4) of the U.P. GST Act, 2017, the Assessing Authority was obligated to grant an opportunity of personal hearing before passing an adverse assessment order. The petitioner relied on previous court decisions to support this argument.

Upon review, the court found merit in the petitioner's argument, agreeing with the interpretation of Section 75(4) as established in previous cases. The court emphasized that the Assessing Authority must provide an opportunity for personal hearing, especially in cases involving significant civil liability. Upholding principles of natural justice, the court held that such an opportunity is essential to ensure a fair and reasoned decision, which can be beneficial for both parties and any subsequent appeal process.

Consequently, the court allowed the writ petition, setting aside the impugned order dated 06.12.2022. The matter was remitted back to the Deputy Commissioner, State Tax, with directions to issue a fresh notice to the petitioner within two weeks, ensuring the petitioner's right to a personal hearing and expeditious conclusion of proceedings.