2023 (7) TMI 250 - HC - GST

Tax Adjudication Order Quashed for Violating Natural Justice Principles, Petitioner Granted Fresh Hearing with Procedural Fairness

HC allowed the writ petition challenging the tax adjudication order, finding fundamental violations of natural justice. The court set aside the order ... Natural justice - opportunity of hearing - compliance with section 75(4) of the U.P. GST Act, 2017 - remand for fresh adjudication - power of writ court to interfere where procedural fairness is deniedNatural justice - opportunity of hearing - compliance with section 75(4) of the U.P. GST Act, 2017 - Whether the adjudicating authority breached principles of natural justice by passing the impugned order before the dates fixed for filing written reply and personal hearing. - HELD THAT: - The Court found that the first notice in the proceedings was dated 03.04.2021 and that the dates communicated to the petitioner for filing a written reply and for personal hearing were 08.06.2021 and 10.06.2021 respectively, whereas the impugned adjudication order was passed on 31.05.2021 and uploaded before those dates. On these undisputed facts the adjudicating authority's course was impermissible both under the general rule of natural justice and in the context of section 75(4) of the Act. The Court held that once dates for reply and hearing have been fixed and communicated, adjudication before those dates flouts the rules of natural justice and vitiates the proceedings. Consequently, preliminary objections based on appealability and limitation were overruled in view of the fundamental breach of procedural fairness, and interference by the writ court was warranted to secure fair play and compliance with statutory procedure. [Paras 6, 7, 8, 10, 11]Impugned order dated 31.05.2021 is set aside and the matter is remitted to the adjudicating authority to pass a fresh order strictly in accordance with law after granting adequate opportunity to the petitioner for filing written reply and for personal hearing, with reasons recorded to address the petitioner's objections.Final Conclusion: Writ petition allowed; impugned adjudication order set aside and matter remitted for fresh decision after affording the petitioner the opportunity of filing a written reply and personal hearing in accordance with law. Issues involved:Challenge to adjudication order dated 31.5.2021; Appealability of the order; Expiry of period of limitation for appeal; Violation of natural justice principles; Flouting of rules of natural justice.Adjudication Order Challenge:The petitioner challenged the adjudication order dated 31.5.2021 passed by the Deputy Commissioner, State Tax, Sector-10 Prayagraj against them.Appealability and Limitation:The order was found to be appealable, but the period of limitation to file the appeal had expired.Violation of Natural Justice:Despite objections raised by the Standing Counsel, it was noted that there was a fundamental issue regarding the rights of the petitioner and the general scheme of the U.P. GST Act, 2017. The Court found that the adjudicating authority had violated natural justice principles by passing the impugned order before the dates fixed for reply and personal hearing.Flouting of Rules:The Court observed that the rules of natural justice had been flouted as the adjudication order was passed before the scheduled dates for reply and oral hearing, which was not permissible under the law.Decision and Remittance:The Court overruled the objections raised by the Standing Counsel and set aside the order dated 31.5.2021. The matter was remitted to the adjudicating authority to pass a fresh order in accordance with the law, ensuring adequate opportunity of hearing for the petitioner and recording reasons to address any objections raised.Conclusion:The writ petition was allowed, and the Registrar Compliance was directed to communicate the order to the Commissioner, Commercial Tax, U.P. Lucknow to prevent such practices in the future.