2023 (11) TMI 515 - HC - GST

Issuance of notice in the proceedings seeking reply by 14.08.2023 - grant of opportunity of personal hearing to the petitioner - principles of natural justice - HELD THAT - 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 - the impugned order itself has been passed on 18.08.2023, while reply to the show-cause-notice had been entertained on 15.07.2023. 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. The impugned order dated 18.08.2023 is set aside. The matter is remitted to the Respondent No.2/Deputy Commissioner, State Tax, Sector-9, Meerut, 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:

The issues involved in the judgment are the failure to provide an opportunity of personal hearing before passing an adverse assessment order under Section 75(4) of the U.P. GST Act, 2017.

Issue 1: Opportunity of Personal Hearing

The challenge in the present petition was against the order passed by the Deputy Commissioner, State Tax, Sector-9, Meerut, raising a demand in excess of Rs. 54,76,018 for the tax period 2020 to 2021. The petitioner contended that the Assessing Authority was obligated to grant an opportunity of personal hearing before passing an adverse assessment order, as per Section 75(4) of the Act. The petitioner relied on previous court decisions to support this argument. The court agreed with the petitioner's stance, emphasizing that the Assessing Authority must provide an opportunity of hearing without the need for a specific request from the assessee. The court highlighted the importance of ensuring a genuine opportunity for a hearing, especially in cases involving significant civil liabilities. The court concluded that the impugned order was set aside, and the matter was remitted for the issuance of a fresh notice to the petitioner to allow for a proper hearing.

Decision:

The High Court allowed the writ petition, setting aside the order dated 18.08.2023 and remitting the matter to the Deputy Commissioner, State Tax, Sector-9, Meerut, to issue a fresh notice to the petitioner within two weeks. The petitioner was directed to appear before the authority for further proceedings to be conducted promptly.