2021 (6) TMI 772 - HC - GST

Court sets aside assessment order, mandates personal hearing under Section 75(4) of CGST Act

The Court allowed the Writ Petition, setting aside the assessment order due to denial of a personal hearing to the petitioner, as required under Section ... Opportunity of personal hearing - principles of natural justice - Section 75(4) of the CGST Act - procedural breach - remand for fresh consideration - adjournment restriction under proviso to Section 75(5)Opportunity of personal hearing - Section 75(4) of the CGST Act - principles of natural justice - procedural breach - remand for fresh consideration - adjournment restriction under proviso to Section 75(5) - Whether the assessment order dated 25.01.2021 is vitiated by denial of an opportunity of personal hearing under Section 75(4) of the CGST Act and whether the order should be set aside and remitted for fresh consideration. - HELD THAT: - The Court found that Section 75(4) mandates that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or where any adverse decision is contemplated. In the present case the petitioner-assessee made a clear and unequivocal written request for personal hearing which was not heeded before passing the impugned assessment order. Denial of that opportunity constituted a procedural breach amounting to infraction of a facet of natural justice and prejudiced the assessee's ability to respond to intricate issues of fact and law. Consequently, the assessment order was liable to be set aside on that ground. The matter is remanded to the assessing authority for fresh consideration after giving the petitioner-assessee an opportunity of personal hearing. The Court directed that such hearing comply with the restriction on adjournments contained in the proviso to Section 75(5) and that no unnecessary adjournments be permitted. The Court expressly did not decide the merits of the assessment or other issues, leaving them open for determination by the assessing authority in accordance with law.Impugned assessment order set aside and matter remanded to the assessing authority to hear the petitioner-assessee and pass a fresh order within two months, subject to the adjournment restriction in the proviso to Section 75(5); merits left open.Final Conclusion: Writ petition allowed; assessment order dated 25.01.2021 set aside for failure to grant the petitioner-assessee a personal hearing under Section 75(4) of the CGST Act and remitted for fresh consideration in accordance with the directions given. Issues:Assessment order confirming CGST amount due to failure to file GSTR-3B inclusive of penalty and interest - Breach of principles of natural justice - Opportunity of personal hearing denied - Compliance with Section 75(4) of the CGST Act required.Analysis:The petitioner, an assessee, challenged the assessment order passed by the 1st respondent confirming a CGST amount on taxable supply declared in GSTR-I for the year 2019-20 due to failure to file GSTR-3B along with penalty and interest. The petitioner contended that no opportunity of hearing was provided despite a revised show-cause notice, citing a decision of the Gujarat High Court in support. The Government Pleader argued that a hearing was extended upon issuance of the initial notice, which the petitioner did not insist upon during the revised notice. However, the petitioner disputed this claim. The Court examined the records and noted a clear demand for a personal hearing, emphasizing the importance of Section 75(4) of the CGST Act in granting such an opportunity.The Court highlighted that Section 75(4) mandates granting an opportunity of hearing upon a written request from the person chargeable with tax or penalty or when an adverse decision is contemplated against them. In this case, the petitioner had clearly requested a personal hearing, which was disregarded leading to the passing of the impugned assessment order. The Court emphasized that procedural requirements, especially regarding natural justice like the opportunity of hearing, must be strictly adhered to. Denial of such an opportunity hinders the assessee from effectively responding to complex factual and legal issues, necessitating the setting aside of the assessment order.Consequently, the Court allowed the Writ Petition, setting aside the assessment order and remanding the matter to the assessing authority for fresh consideration after providing a personal hearing to the petitioner. The assessing authority was directed to pass an appropriate order within two months from the date of the Court's communication, with a restriction on unnecessary adjournments. The Court clarified that it did not delve into the merits of the case, leaving other issues raised in the writ petition open for independent consideration by the assessing authority in accordance with the law. No costs were awarded, and any pending Miscellaneous Petitions related to the Writ Petition were to be closed as a result of the judgment.