Taxpayer Wins Challenge: GST Assessment Order Invalidated for Procedural Unfairness Under Section 75(4)

HC upheld petitioner's challenge to tax assessment order, finding violation of natural justice principles. The court set aside the order due to denial of oral hearing as mandated by Section 75(4) of U.P. GST Act, 2017. Matter was remitted back to Assessing Authority with directions to issue fresh notice and provide fair hearing within two weeks.

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Issues involved: Challenge to the order passed by the Assistant Commissioner for tax period 2018-19 due to denial of opportunity of oral hearing before the Assessing Authority.

Summary:
The petitioner challenged the order passed by the Assistant Commissioner, State Tax, for the tax period 2018-19, raising a demand in excess of Rs.19,06,242. The main contention was that the petitioner was denied the opportunity of oral hearing before the Assessing Authority. The petitioner argued that the Assessing Authority was required to afford an opportunity of personal hearing before passing an adverse assessment order, as per Section 75(4) of the U.P. GST Act, 2017. The petitioner relied on previous court decisions to support this argument.

The High Court, after hearing both parties and examining the record, agreed with the petitioner's contention. The Court emphasized that the Assessing Authority must provide an opportunity of hearing even in cases of heavy civil liability to ensure the principles of natural justice are upheld. The Court noted that the impugned order was passed without granting the petitioner a proper hearing, which could lead to a lack of clarity in the assessee's stand. Therefore, the Court allowed the writ petition, set aside the order dated 23.03.2022, and remitted the matter back to the Assistant Commissioner to issue a fresh notice to the petitioner within two weeks, ensuring a fair opportunity for the petitioner to be heard before any decision is made. This would not only uphold the rules of natural justice but also facilitate the authorities in passing a reasoned order in the interest of justice.

This judgment highlights the importance of providing a genuine opportunity of hearing to parties involved in tax assessments to ensure fairness and justice in the process.

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