Court mandates personal hearing under Section 75(4) of GST Act for fair assessment

The Court held that under Section 75(4) of the Central Goods and Service Tax Act, a personal hearing must be granted upon specific request or when an adverse decision is anticipated. As the petitioner's explanation was not accepted, the Court ruled that a personal hearing was necessary. Consequently, the Court allowed the writ petition, setting aside the impugned order and directing a hearing for the petitioner without additional notice. The Court mandated a denovo order of assessment within four weeks from the hearing date, with relevant materials to be considered.

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Issues: Violation of principles of natural justice due to lack of personal hearing before passing the impugned order. Interpretation of Section 75(4) of the Central Goods and Service Tax Act, 2017 regarding the requirement of granting personal hearing.

In this case, the petitioner challenged an order dated 24.08.2020 on the grounds of violation of principles of natural justice, asserting that they were not given a personal hearing before the order was passed. The petitioner relied on Section 75(4) of the CGST Act, which mandates the granting of a hearing upon specific request or when an adverse decision is contemplated against the taxpayer. The respondent, the Revenue, argued that no request for a personal hearing was received from the petitioner, and a reply to the show cause notice was submitted, requesting consideration of the explanation provided. The Revenue contended that without a specific request for a personal hearing, there was no obligation to provide such an opportunity.

The Court noted that while Sections 73 and 74 of the Act do not explicitly require a personal hearing before completion of proceedings, Section 75(4) outlines that a personal hearing must be granted when a specific request is made or when an adverse decision is anticipated. The Court emphasized that unless the explanation offered by the assessee is accepted, a personal hearing is necessary. The Court interpreted Section 75(4) to mandate the Revenue to provide a personal hearing to the petitioner in all cases except where the explanation is accepted without the need for further discussion.

Consequently, the Court allowed the writ petition, setting aside the impugned order and directing that the petitioner be heard on 29.01.2021 at 10.30 a.m. without additional notice. The Court instructed that any relevant materials should be considered, and a denovo order of assessment must be passed within four weeks from the date of the hearing. The connected Miscellaneous Petition was closed with no costs awarded.

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