Tax Order Quashed: Procedural Flaws Invalidate State Tax Officer's Decision, Ensuring Fair Hearing for Petitioner

HC allowed the petition challenging a tax order due to procedural irregularities. The court quashed the State Tax Officer's order for violating natural justice principles, specifically the lack of adequate hearing opportunity. The case was remanded for a fresh hearing, directing the petitioner to appear on 8 December, 2023, with all legal contentions preserved and no cost imposed.

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Issues Involved:
The petition under Article 226 of the Constitution of India assails the order dated 26 July, 2023 passed by the State Tax Officer, Nodal Division-12, Mumbai directing the petitioner to pay tax, interest, and penalty.

Issue 1: Breach of Principles of Natural Justice

The petitioner contended that the impugned order was illegal due to a breach of natural justice as no hearing was granted. The petitioner had requested a personal hearing in the reply submitted but was only informed of the hearing two days in advance. Despite intending to attend, the petitioner could not appear, and the State Tax Officer proceeded to pass the order without granting a final opportunity.

Issue 2: Jurisdiction of State Tax Officer

The petitioner argued that the State Tax Officer lacked jurisdiction to levy demands under the IGST Act. The petitioner sought to have the impugned order quashed and set aside, requesting a proper hearing and a lawful decision by the State Tax Officer.

Judgment:

After hearing arguments from both parties and reviewing the record, the court found merit in the petitioner's contentions. It was noted that the petitioner had requested a personal hearing, and the failure to appear on one occasion should not have led to the assumption of disinterest without a valid reason. The court observed that no written notice was issued adjourning the proceedings, and the impugned order did not consider the petitioner's case adequately.

In light of the above, the court decided to quash and set aside the impugned order dated 26 July, 2023. The proceedings were remanded to the State Tax Officer for a decision in accordance with the law after granting the petitioner a proper opportunity for a personal hearing. The petitioner was directed to appear before the authority on 8 December, 2023, and the State Tax Officer would set a suitable date for the hearing. The court emphasized that if the petitioner failed to appear despite notice, the State Tax Officer could proceed and pass an appropriate order. All contentions of the parties were expressly kept open, and the matter was disposed of with no costs incurred.

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