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Freight Forwarding Company Wins Case: Tax Authority Ordered to Provide Fair Hearing After Violating Natural Justice Principles HC found a violation of natural justice in a tax case involving a freight forwarding service. The show cause notice was invalidated due to denial of ...
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Freight Forwarding Company Wins Case: Tax Authority Ordered to Provide Fair Hearing After Violating Natural Justice Principles
HC found a violation of natural justice in a tax case involving a freight forwarding service. The show cause notice was invalidated due to denial of personal hearing, despite the petitioner's request. The court quashed the impugned order and directed the tax authority to conduct a fresh hearing, allowing the petitioner to present their case within four weeks, ensuring compliance with statutory principles.
Issues involved: The issues involved in the judgment are related to the violation of principles of natural justice in the context of a show cause notice issued under the Central Goods and Services Tax Act, 2017.
Details of the Judgment:
Issue 1: Violation of Principles of Natural Justice - The petitioner, engaged in freight forwarding and related services, received a show cause notice demanding a substantial amount of tax, interest, and penalty. - The petitioner contended that the show cause notice did not grant an opportunity for a personal hearing as requested, contrary to Section 75(4) of the CGST Act. - The respondents argued that since the petitioner had inadvertently marked "No" for personal hearing in their reply, no hearing was granted. - The court found that the impugned order was passed without granting a personal hearing, violating the principles of natural justice as per Section 75(4) of the CGST Act.
Issue 2: Adjudicating Officer's Obligation - The court noted that the petitioner had explicitly requested a personal hearing despite the inadvertent marking of "No" in the reply. - It was emphasized that the adjudicating officer should have considered the specific request for a hearing rather than taking a mechanical approach based on the tick mark. - As the petitioner did not waive the right to a personal hearing, the impugned order was deemed to be in breach of natural justice and contrary to Section 75(4) of the CGST Act.
Conclusion: - The court allowed the petition, quashing the impugned order and directing respondent no. 3 to grant a personal hearing to the petitioner. - Respondent no. 3 was instructed to consider all contentions and pass an appropriate order within four weeks, in compliance with the law. - The judgment was disposed of with no costs incurred by either party.
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