2023 (2) TMI 588 - HC - GST

Taxpayer's Rights Triumph: Assessment Order Nullified for Denying Personal Hearing Under GST Act Section 75(4)

HC quashed the assessment order due to violation of natural justice principles under Section 75(4) of GST Act, 2017. The court found that no personal ... Right to personal hearing - opportunity of hearing where an adverse decision is contemplated - violation of principles of natural justice - Section 75(4) of the GST Act, 2017 - requirement to grant personal hearing prior to adverse assessment - quashing and remand for fresh considerationRight to personal hearing - opportunity of hearing where an adverse decision is contemplated - Section 75(4) of the GST Act, 2017 - requirement to grant personal hearing prior to adverse assessment - violation of principles of natural justice - quashing and remand for fresh consideration - Whether the impugned assessment could be sustained despite no personal hearing being afforded when an adverse decision was taken under the assessment proceedings. - HELD THAT: - The Court held that Section 75(4) of the GST Act, 2017 mandates that an opportunity of personal hearing must be granted where an adverse decision is contemplated against the person chargeable with tax or penalty, irrespective of whether the person has requested a hearing. The High Court agreed with earlier decisions of the Court applying the same principle and found on the facts that no personal hearing was afforded to the petitioner while an adverse assessment and penalty were imposed. The omission amounted to a breach of the principles of natural justice. As the statutory requirement of hearing was not complied with and an adverse order was passed, the assessment order could not be sustained and had to be quashed and remitted for fresh consideration in accordance with law, with directions to afford the petitioner personal hearing before passing the final order. [Paras 4, 5, 6, 7, 8]Impugned assessment order dated 28.12.2022 quashed for failure to grant personal hearing as mandated by Section 75(4); matter remanded to respondent for fresh consideration after granting personal hearing and observing principles of natural justice, with time-bound direction for disposal.Final Conclusion: The assessment order for AY 2021-2022 is quashed for violation of the statutory right to personal hearing under Section 75(4) of the GST Act, 2017 and remitted to the assessing authority for fresh consideration after granting the petitioner a personal hearing and observing principles of natural justice; the authority directed to pass final orders within the stipulated period. Issues:Challenge to assessment order due to lack of personal hearing under Section 75(4) of the GST Act, 2017.Analysis:The petitioner filed a Writ Petition challenging the assessment order for the assessment year 2021-2022, contending that no personal hearing was provided during the assessment proceedings. The impugned assessment order determined the tax liability under CGST and SGST, imposing a penalty totaling Rs. 8,88,584.The petitioner relied on Section 75(4) of the GST Act, 2017, which mandates granting a personal hearing when an adverse decision is contemplated against the taxpayer. The Court noted that personal hearing is necessary even if no formal request is made by the taxpayer. Previous judgments by two Judges of the Court on this matter were cited, upholding the mandatory nature of providing personal hearing in case of an adverse decision.Agreeing with the previous decisions, the Court held that the absence of a personal hearing in the impugned assessment proceedings violated the principles of natural justice. Consequently, the assessment order was quashed, and the matter was remanded back to the respondent for fresh consideration, emphasizing the need for a personal hearing within twelve weeks.The Court directed the respondent to ensure compliance with the principles of natural justice and grant the petitioner a personal hearing on a specified date. The Writ Petition was disposed of with no costs, and the connected Writ Miscellaneous Petition was closed.