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of <h1>Natural Justice Prevails: Tax Order Quashed for Lack of Hearing, Petitioner's Right to Fair Process Upheld</h1> <h3>M/s. Kalaivani Enterprises, Represented by its Proprietor G. Kalaivani Versus The Assistant Commissioner (ST), The Joint Commissioner (ST) Intelligence, Erode.</h3> HC found a violation of natural justice in a tax proceeding where an order was passed without providing the petitioner an opportunity for personal ... Levy of Penalty - passing on Input Tax Credit to various recipients through GSTR-1 without actual supply of goods - opportunity of hearing not provided - principles of natural justice - HELD THAT:- Although, the petitioner has been issued with notices which has not replied, the impugned order has been passed directly without affording an opportunity of personal hearing to the petitioner pursuant to the Show Cause Notice in Form GST DRC-01 dated 13.02.2023. It is clear that there is a violation of principles of natural justice. The impugned order dated 16.03.2023 passed by the first respondent is set aside and the case is remitted back to the respondents for passing de novo order - Petition allowed by way of remand. Issues Involved: Violation of principles of natural justice in passing the impugned orderThe petitioner was issued a notice in DRC-01A on 31.10.2022, alleging that the petitioner had passed on Input Tax Credit without actual supply of goods, attracting penalty u/s 122(2) of the Central Goods and Service Tax Act, 2017. The impugned order dated 16.03.2023 was passed directly without affording an opportunity of personal hearing to the petitioner after the Show Cause Notice in Form GST DRC-01 dated 13.02.2023. The court found a violation of principles of natural justice and set aside the impugned order, remitting the case back to the respondents for passing a de novo order. The impugned order was directed to be treated as a Show Cause Notice, and the petitioner was given 15 days to file a reply. The respondents were instructed to pass a speaking order after calling the petitioner for a personal hearing within 45 days.Outcome:The High Court of Madras set aside the impugned order dated 16.03.2023 and remitted the case back to the respondents for passing a de novo order, emphasizing the importance of adhering to principles of natural justice in such proceedings.
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