Natural Justice Prevails: CGST Act Order Quashed for Denying Hearing and Failing to Provide Crucial Procedural Parameters

HC found a violation of natural justice in a CGST Act proceeding. The order under Section 73 was quashed due to lack of personal hearing and failure to provide crucial parameters 70 and 73 to the petitioner. The court directed respondents to furnish detailed parameters, allow petitioner's personal hearing, and pass a fresh order in accordance with legal principles.

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Issues involved: Violation of principles of natural justice in passing the impugned order under Section 73 of the Central Goods and Services Act, 2017 (CGST) without providing a personal hearing and without furnishing detailed parameters 70 and 73 to the petitioner.

Summary of Judgment:

Issue 1: Violation of principles of natural justice - Lack of personal hearing
The petitioner contended that the impugned order was passed without providing a personal hearing, as mandated by Section 75(4) of the CGST Act. The Court observed that the absence of a personal hearing in the case of an adverse order being passed against the assessee constitutes a violation of principles of natural justice. The respondents failed to provide a valid explanation for not granting a personal hearing to the petitioner, despite multiple requests for the same.

Issue 2: Failure to furnish detailed parameters 70 and 73
The petitioner argued that the parameters 70 and 73, on the basis of which the impugned order was passed, were not furnished despite repeated requests. The respondents claimed that the parameters were available on the portal and accessible to the petitioner. However, the Court noted that details of parameters 70 and 73 were not provided to the petitioner, raising concerns about the lack of transparency and fairness in the proceedings. The Court held that the failure to furnish these crucial details amounted to a breach of natural justice.

Conclusion:
The High Court held that the impugned order under Section 73, dated 26th July 2023, was quashed and set aside. The respondent No. 3 was directed to furnish detailed parameters 70 and 73 within one week. The petitioner was given one week to submit its reply based on the additional material provided. A suitable date for a hearing was to be set by respondent No. 1 after two weeks. Following the petitioner's personal hearing, respondent No. 1 would pass an appropriate order in accordance with the law. The Court emphasized that all contentions of the parties were kept open, and the writ petition was disposed of without any order as to costs.

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