2023 (12) TMI 666 - HC - GST

Violation of principles of natural justice - impugned order is passed without giving any personal hearing although mandated by Section 75(4) of the CGST Act - HELD THAT - There has been a violation of principles of natural justice in passing the impugned order for more than one reason; firstly, under Section 75 sub-section (4), it is mandatory for the respondents to give a personal hearing to the petitioner if an adverse order is contemplated to be passed against the assessee. In the facts of the present case, a personal hearing was not given to the petitioner, inspite of an adverse order having been passed. Secondly, the petitioner vide various emails requested for details of parameters No. 70 and 73 be furnished. However, details of such parameters were not furnished to the petitioner. There is no explanation by the respondents as to why details of parameter No. 72 were furnished and not the parameters of 70 and 73, except to state that everything is available on the portal. If it was available on the portal, then there was no reason why parameter 72 details were furnished and parameters 70 and 73 is not furnished. Thirdly, the impugned order on one hand states that no reply is submitted, whereas on the other hand states that the documents were not sufficient which itself is self-contradictory. Fourthly, the impugned order does not give any reasons of the alleged discrepancies so as to enable the petitioner to file its submission. The impugned order would certainly be required to be held to be in breach of principles of natural justice so as to enable this Court to exercise jurisdiction under Article 226 of the Constitution of India although, an alternate remedy is available - order under Section 73 dated 26th July 2023 is quashed and set aside.

Summary

Issues involved: Violation of principles of natural justice in passing the impugned order under Section 73 of the Central Goods and Services Act, 2017 (CGST) without providing a personal hearing and without furnishing detailed parameters 70 and 73 to the petitioner.

Summary of Judgment:

Issue 1: Violation of principles of natural justice - Lack of personal hearing
The petitioner contended that the impugned order was passed without providing a personal hearing, as mandated by Section 75(4) of the CGST Act. The Court observed that the absence of a personal hearing in the case of an adverse order being passed against the assessee constitutes a violation of principles of natural justice. The respondents failed to provide a valid explanation for not granting a personal hearing to the petitioner, despite multiple requests for the same.

Issue 2: Failure to furnish detailed parameters 70 and 73
The petitioner argued that the parameters 70 and 73, on the basis of which the impugned order was passed, were not furnished despite repeated requests. The respondents claimed that the parameters were available on the portal and accessible to the petitioner. However, the Court noted that details of parameters 70 and 73 were not provided to the petitioner, raising concerns about the lack of transparency and fairness in the proceedings. The Court held that the failure to furnish these crucial details amounted to a breach of natural justice.

Conclusion:
The High Court held that the impugned order under Section 73, dated 26th July 2023, was quashed and set aside. The respondent No. 3 was directed to furnish detailed parameters 70 and 73 within one week. The petitioner was given one week to submit its reply based on the additional material provided. A suitable date for a hearing was to be set by respondent No. 1 after two weeks. Following the petitioner's personal hearing, respondent No. 1 would pass an appropriate order in accordance with the law. The Court emphasized that all contentions of the parties were kept open, and the writ petition was disposed of without any order as to costs.