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2024 (2) TMI 237 - HC - GSTViolation of principles of natural justice - no opportunity of personal hearing granted to the Petitioner - Petitioner had not paid or short paid CGST/MGST - HELD THAT - From a plain reading of Section 75(4), it is absolutely clear that, even in a case where the person chargeable with tax or penalty has not requested for a personal hearing, the Department is bound to give a personal hearing when an adverse decision is contemplated against such a person. In the present case, by the said Order dated 8th September 2022, a decision adverse to the Petitioner has been passed. In these circumstances, Respondent No. 3 was bound to give a personal hearing to the Petitioner before passing the said Order dated 8th September 2022. This would be irrespective of the fact as to whether the Petitioner had asked for such a personal hearing or not. In the present case, since the said Order dated 8th September 2022, has been passed without giving any personal hearing to the Petitioner, the same is in violation of the principles of natural justice and ex-facie contrary to the provisions of Section 75(4) of the CGST/MGST Act. The Impugned Order dated 8th September 2022 passed by Respondent No. 3 is hereby quashed and set aside - Petition allowed.
Issues:
The issues involved in the judgment are quashing of an Order dated 8th September 2022 passed by Respondent No. 3 on the ground of being contrary to the provisions of Section 75(4) of the Central Goods and Services Tax Act, 2017 and violation of the principles of natural justice. Details of the Judgment: Issue 1: Quashing of Order The Petitioner, engaged in construction and sale of flats, sought to quash an Order dated 8th September 2022 passed by Respondent No. 3, alleging it was contrary to Section 75(4) of the CGST Act and violated natural justice principles. The audit findings revealed tax liability on flats transferred to Slum Dwellers, leading to a Show Cause Notice for unpaid CGST/MGST. Despite the Petitioner's replies, the Order required payment of Rs. 20,02,16,288. The Petitioner contended the Order was passed without a personal hearing, breaching Section 75(4) and natural justice. Issue 2: Legal Interpretation Section 75(4) mandates a personal hearing when an adverse decision is contemplated, even if not requested by the person chargeable. The Court held that the absence of a request for a personal hearing does not absolve the Department from granting one when an adverse decision is anticipated. The Order's issuance without a personal hearing was deemed a violation of natural justice and Section 75(4) of the CGST Act. Issue 3: Judicial Precedents The Court referenced prior decisions, including Kuehne Nagel Private Limited Vs. The State of Maharashtra & Ors. and Hydro Pneumatic Accessories India Pvt. Ltd. Vs. The Assistant Commissioner of State Tax, emphasizing the necessity of a personal hearing before adverse decisions. These cases supported the view that a personal hearing is mandatory, regardless of whether requested, when an adverse decision is imminent. Conclusion The Court ruled in favor of the Petitioner, quashing the Order and directing Respondent No. 3 to provide a personal hearing and issue a new Order within four weeks. The judgment highlighted the importance of adhering to procedural fairness and statutory requirements, emphasizing the right to a personal hearing even in the absence of a specific request.
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