2023 (1) TMI 88 - HC - GST

Tax Assessment Orders Invalidated Due to Procedural Lapses and Denial of Fair Hearing Under CGST Act Section 75

Hindustan Contruction Company Ltd., Versus The Union Of India, State Of Rajasthan, Joint Commissioner, Rajasthan,

HC found violations of natural justice and CGST Act Section 75 in tax assessment orders. The ex parte orders were quashed due to failure to consider ... Levy of Interest and penalty - delayed payment of tax - petitioner has challenged the final assessment order on the ground of non-adherence to the principles of natural justice, violation of mandatory requirement of Section 75 of the CGST Act and numerous other grounds - non-application of mind - violation of principles of natural justice - HELD THAT:- It is clear on the face of the record that the officer did not consider the detailed reply submitted on behalf of the petitioner while passing the impugned orders which are sketchy and non-speaking on the face of it. Thus, the impugned orders, apart from suffering from the vice of non-application of mind to the reply of the party, also run in violation of mandatory requirement of Section 75(6) of the CGST Act - Hence, the impugned orders cannot be sustained and are hereby quashed and set aside. The petitioner’s representative shall appear before the Joint Commissioner on 22.12.2022, whereafter, opportunity of hearing shall be provided and fresh order shall be passed assigning proper reasons - Petition allowed by way of remand. Issues:Challenging final assessment order based on non-adherence to natural justice, violation of Section 75 of CGST Act, and other grounds.Analysis:The writ petitions were filed to challenge the orders imposing interest and penalty for delayed tax payment. The petitioner contended that the final assessment order violated principles of natural justice and mandatory requirements of the CGST Act. The petitioner's counsel argued that despite providing a detailed reply to the show cause notice and requesting a personal hearing, the impugned orders were passed without considering the petitioner's assertions.The Court issued a show cause notice to the Joint Commissioner, directing him to appear with the original dispatch register. The Joint Commissioner explained that the notice for personal hearing was dispatched and delivered to the petitioner's representative, and no malafide intention was involved in passing the ex parte orders due to the petitioner's absence during the show cause notice proceedings.After reviewing the original record, the petitioner's counsel withdrew allegations of malafides but argued that the impugned orders were not speaking and should be set aside. The petitioner sought an opportunity to present oral submissions, urging the Joint Commissioner to pass a fresh reasoned order after considering the detailed reply.The officer's representative explained that the impugned notice was issued due to delayed tax payment, justifying the demand for interest and penalty. Despite the petitioner's representative submitting a reply and being informed about the next date for a personal hearing, no one appeared on the scheduled date, leading to the ex parte order.The Court noted that the impugned orders did not consider the detailed reply submitted by the petitioner, violating the mandatory requirement of Section 75(6) of the CGST Act, which mandates setting out relevant facts and the basis of the decision in the order. Consequently, the Court quashed the impugned orders and directed the petitioner's representative to appear before the Joint Commissioner for a fresh hearing and reasoned order.In conclusion, the Court allowed the writ petitions, setting aside the impugned orders and discharging the show cause notice issued to the Joint Commissioner, with no costs imposed.