Tax Order Invalidated: Procedural Fairness Prevails, Hearing Rights Affirmed Under Section 75(4) of GST Act

HC quashed tax order due to lack of proper personal hearing under Section 75(4) of GST Act. Despite respondents suggesting alternative appeal remedy, court found procedural defect fatal. Order remitted for fresh proceedings, mandating petitioner be given opportunity to present case with specified hearing details, upholding principles of natural justice.

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Issues Involved:
Challenge to order under section 74 of MPSGST/CGST Act, 2017 and section 20 of IGST Act, 2017 for upholding tax, interest, and penalty mentioned in the show cause notice.

Issue 1: Opportunity of Personal Hearing
The petitioner challenged the order dated 24.08.2022 for lack of personal hearing, as required under Section 75(4) of the Act. The show cause notice mentioned a personal hearing but did not specify the date, time, and venue. The petitioner argued that personal hearing is mandatory before passing such orders, citing the Allahabad High Court decision in Bharat Mint & Allied Chemicals Vs. Commissioner of Commercial Tax. The court observed that Section 75(4) mandates granting a hearing when an adverse decision is contemplated, even without a request. The absence of a specified personal hearing rendered the impugned order unsustainable.

Issue 2: Alternative Remedy of Appeal
The respondents defended the order but failed to justify the lack of personal hearing. They suggested the petitioner pursue an appeal instead. However, the court noted that the availability of an alternative remedy does not negate the need for due process and natural justice. In light of the absence of a proper hearing, the court relied on the Allahabad High Court decision to quash the impugned order and remit the matter for a fresh order after affording the petitioner a proper personal hearing.

This judgment highlights the importance of adhering to procedural requirements, particularly regarding personal hearings, in administrative decisions under the GST Acts. The court's decision emphasizes the significance of providing a fair opportunity for parties to present their case before adverse orders are passed, in line with principles of natural justice and statutory provisions.

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