Tax department's bank account attachment order violated natural justice by failing to provide adequate notice and hearing opportunity

The HC held that the tax department's order violated principles of natural justice by failing to provide adequate notice and hearing opportunity to the petitioner before attaching their bank account. The show cause notice was only uploaded online without direct service, and the department proceeded without awaiting the petitioner's response. The court found these procedural opportunities were nominal rather than genuine, constituting gross violation of natural justice. The impugned order was set aside and the matter remanded to the State Tax Officer for reconsideration with proper adherence to natural justice principles.

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Issues involved:
The main issue in this case is the violation of principles of natural justice in the order passed by the State Tax Officer, leading to the attachment of the petitioner's bank account.

Violation of Principles of Natural Justice:
The petitioner, engaged in providing health insurance, challenged the order directing payment of tax and penalty, citing lack of notice and personal hearing. The petitioner argued that the show cause notice was not directly served and only uploaded online, depriving them of a fair opportunity for defense. The petitioner contended that the order violated principles of natural justice.

Contentions of the Respondent-Department:
The Government Advocate for the respondent-Department argued that a show cause notice was issued and uploaded online after being returned with an endorsement of 'Left'. As the petitioner did not respond, the State Tax Officer confirmed the proposals in the notice. The Government Advocate maintained that the order was legally sound.

Failure to Provide Personal Hearing:
The petitioner's counsel refuted the respondent's claim of the notice being returned, emphasizing that even if not accepted, the petitioner should have been granted a personal hearing before the final assessment order. It was highlighted that the respondent fixed a date for hearing before the deadline for reply, denying the petitioner a fair chance to present their case.

Admission of Lack of Personal Hearing:
During arguments, the Government Advocate admitted that no personal hearing was provided to the petitioner after 30 days. The Government Advocate requested appropriate orders, suggesting the petitioner be directed to appear before the respondent-Department if the matter is remanded for fresh consideration.

Judgment and Remand:
The High Court found the impugned order to be in violation of natural justice principles and set it aside. The matter was remanded to the State Tax Officer for reconsideration. The State Tax Officer was directed to provide a fair opportunity for a personal hearing, consider the petitioner's documents, and pass a reasoned order. The consequential order attaching the petitioner's bank account was also set aside. The petitioner was instructed to appear for the hearing, and the bank account attachment order was lifted. No costs were awarded, and the connected Writ Miscellaneous Petition was closed.

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