High Court quashes GST order, stresses natural justice principles, emphasizes fairness in administrative actions

The High Court allowed the writ application, quashing an order passed under Section 74 of the GST Act without affording the applicant a hearing during the lockdown period. The Court emphasized the importance of adhering to principles of natural justice, remitting the matter for a fresh decision after granting the applicant an opportunity for a proper hearing. The decision highlighted the significance of procedural fairness in administrative actions, particularly in exceptional circumstances like a lockdown, underscoring the right to a hearing before passing orders under the GST Act.

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Issues:
Challenge to order passed under Section 74 of the Goods and Service Tax Act, 2017 without opportunity of hearing during lockdown period.

Analysis:
The writ applicant, a Proprietor of a Proprietary concern engaged in the business of iron and scrap, filed a writ application under Article 226 of the Constitution of India seeking various reliefs, including quashing of an order passed under Section 74 of the GST Act without following due process. The applicant contended that the order was passed during the lockdown period without providing an opportunity of hearing. The main contention was the violation of the principle of natural justice due to the lack of a hearing before passing the order.

The High Court, after considering the facts, noted that the impugned order was passed without giving any opportunity of hearing to the writ applicant. The Court observed that the order was issued during a complete lockdown period, raising concerns about procedural fairness. The counsel for the writ applicant requested the quashing of the order and a remittance of the matter to the concerned authority for providing an opportunity of hearing to the applicant.

During the hearing, the Department agreed to give the writ applicant an opportunity of hearing and to pass a fresh order accordingly. Consequently, the High Court quashed and set aside the impugned order dated 22.05.2020. The matter was remitted to the concerned authority for affording the writ applicant a proper hearing and passing an appropriate order in accordance with the law. The Court granted the applicant eight weeks to appear before the authority for the hearing. It was further clarified that the Court did not delve into the merits of the case but focused on procedural fairness and the right to a hearing.

In conclusion, the High Court allowed the writ application, emphasizing the importance of adhering to principles of natural justice and providing an opportunity of hearing before passing orders, especially during extraordinary circumstances like a lockdown. The Court's decision to quash the order and remit the matter for a fresh decision after a proper hearing reflects the significance of procedural fairness in administrative actions under the GST Act.

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