2020 (9) TMI 206 - HC - GST

High Court quashes assessment orders, stresses fair hearing

The Madras High Court, under the Central Goods and Services Tax Act, 2017, set aside three assessment orders due to a violation of natural justice ... Principles of natural justice - right to effective opportunity of hearing - personal hearing notice - quasi-judicial assessment procedure - remand for fresh considerationPrinciples of natural justice - right to effective opportunity of hearing - personal hearing notice - Whether the assessments passed on the same day as a personal hearing notice (issued the previous day) violated the principles of natural justice by denying an effective opportunity of hearing to the petitioner. - HELD THAT: - The Court found that a personal hearing notice issued on 13.02.2020 listing a hearing on 14.02.2020, followed by finalization of assessments on the same day, did not afford the petitioner an effective and realistic opportunity to be heard. Reliance was placed on the view in S. Velu Palandar v. Deputy Commercial Tax Officer that when a quasi-judicial authority fixes a date for hearing, fairness requires that the authority wait until the end of the working day so that the opportunity afforded is real and not merely notional. Administrative convenience may permit an outer time-limit, but equity and justice demand a reasonable and effective chance to make submissions by the end of the working day. Applying that principle, the Court concluded that the assessments finalized on the same day of the listed hearing militated against natural justice and could not stand. [Paras 3, 5]Impugned assessment orders set aside for breach of natural justice and remanded for fresh hearing.Remand for fresh consideration - quasi-judicial assessment procedure - Procedure to be followed on remand after setting aside the assessment orders. - HELD THAT: - Having set aside the assessments for failure to afford effective hearing, the Court directed that fresh notice be issued to enable the petitioner to appear and make submissions. The Assessing Authority was directed to pass orders afresh in accordance with law within eight weeks from the date of first hearing after such notice. The remand is for fresh consideration of the matters which were the subject of the original assessment, to be decided on merits following a proper opportunity to be heard. [Paras 5]Assessments remanded; fresh hearing to be granted and fresh orders to be passed within eight weeks from first hearing.Final Conclusion: The assessments dated 14.02.2020 for the periods 2017-18 to 2019-20 are set aside for denial of effective hearing; fresh notice shall be issued and the Assessing Authority shall pass orders within eight weeks from the date of first hearing in accordance with law. Issues: Challenge to three assessment orders under the Central Goods and Services Tax Act, 2017 for the periods 2017-18 to 2019-20; Violation of principles of natural justice regarding personal hearing notice and same-day assessment.The judgment delivered by Honorable Dr. Justice Anita Sumanth of the Madras High Court pertains to the challenge against three assessment orders dated 14.02.2020 under the Central Goods and Services Tax Act, 2017 for the periods 2017-18 to 2019-20. The main contention raised was the violation of the principles of natural justice, specifically regarding the lack of an effective opportunity for the petitioner during the assessment process. The learned Special Government Pleader acknowledged that the personal hearing notice issued on 13.02.2020 for a hearing on 14.02.2020 did not provide sufficient time for the petitioner to prepare and present their case adequately.In the judgment, reference was made to a decision by a learned Single Judge of the Court highlighting the importance of allowing sufficient time for parties to present their objections during assessments. The Judge emphasized the need for a realistic and effective opportunity for individuals to state their case, rather than a notional or impractical timeframe. It was noted that fixing a specific hour of a day as a deadline for submissions could be detrimental to the principles of natural justice, especially when the assessing authority finalizes the assessment on the same day as the hearing.Based on the discussion and legal principles outlined, the Court set aside the impugned assessment orders and directed that a fresh notice be issued to the petitioner to enable them to appear and present their submissions. The Court mandated that any subsequent orders should be passed within eight weeks from the date of the first hearing, ensuring compliance with the law. The writ petitions were disposed of accordingly, and connected miscellaneous petitions were closed without imposing any costs on either party.