Legal Victory: Tax Authority Ordered to Reissue Notice After Violating Petitioner's Right to Fair Hearing Under Section 75(4)

HC ruled in favor of petitioner, finding violation of natural justice principles. The tax authority's order was set aside due to denial of oral hearing, despite petitioner's prior online response. Court mandated a fresh notice be issued within two weeks, ensuring the petitioner's right to a fair hearing and proper assessment under Section 75(4) of U.P. GST Act, 2017.

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

Judgment Details:
The petitioner raised a challenge against the order passed by the Assistant Commissioner, State Tax, Sector-6, Varanasi for the tax period 2018-19, claiming that he was completely denied the opportunity of oral hearing before the Assessing Authority. The petitioner argued that as per Section 75(4) of the U.P. GST Act, 2017, the Assessing Authority was obligated to provide an opportunity of personal hearing before passing an adverse assessment order. The petitioner relied on a decision of a coordinate bench of the Court and a decision of the Gujarat High Court to support his claim.

The revenue contended that the petitioner was denied the opportunity of hearing because he had declined the option for personal hearing in the reply to the show-cause-notice submitted online. The revenue argued that since the petitioner had declined the opportunity of hearing, he could not now claim any error in the impugned order.

After hearing both parties and examining the record, the Court found that as per Section 75(4) of the Act, an opportunity of hearing must be granted where any adverse decision is contemplated against the person chargeable with tax. The Court agreed with the view taken by a coordinate bench that the Assessing Authority must afford the opportunity of personal hearing before passing an adverse order, regardless of whether the assessee had declined the option for personal hearing.

The Court emphasized that in cases involving heavy civil liability, providing even minimal opportunity of hearing is essential to ensure the principles of natural justice are upheld. Granting such an opportunity not only ensures the observance of natural justice rules but also allows for the authority to pass a reasoned order that serves the interest of justice and facilitates a better understanding at subsequent stages.

Consequently, the Court allowed the writ petition, set aside the impugned order, and remitted the matter back to the Assistant Commissioner to issue a fresh notice to the petitioner within two weeks, ensuring the petitioner's right to a fair hearing and expeditious conclusion of the proceedings.

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