2024 (2) TMI 1180 - HC - GST

Violation of principles of natural justice in assessment proceedings leads to setting aside ex-parte order and fresh opportunity.

Violation of principles of natural justice was found where an assessing authority fixed a hearing date but did not pass an order or communicate a fresh ... Violation of principles of natural justice - further opportunity of hearing not provided - ex-parte order - HELD THAT:- Whatever be the correct fact as to the status of proceedings conducted on 06.11.2023, the order does not make any mention of the same. It is equally true that the assessing authority did not pass any order on the date fixed i.e. 06.11.2023. Instead he has chosen to pass the order on 20.11.2023, 14 days thereafter. Neither the impugned order nor the instructions of the learned Standing Counsel indicate that any date was fixed for 20.11.2023. Without fixing any further date and without giving petitioner any further opportunity the impugned order has been passed. Rules of natural justice ensure fairness in proceedings. Once the authority had fixed the matter for hearing on 06.11.2023 it was incumbent on that authority either to pass the order or to fix another date and communicate the same to the petitioner. Communication of the other date was necessary as according to the assessing authority the petitioner failed to appear before it on the date fixed on 06.11.2023 - In absence of any provision under the Act to allow for ex-parte proceedings to arise in such facts, it is found that the breach of natural justice pressed by the petitioner is real. The short time of five days granted by the notice dated 13.06.2023 itself suggests the unnecessary hurry in which the proceedings were sought to be concluded. In any case since no order was passed on 06.11.2023 and no notice was issued for the next date 20.11.2023, we find that the proceedings had been wrongly concluded ex-parte against the petitioner. The order dated 20.11.2023 is set aside. The petitioner may treat the said order to be the final notice issued to him. It may file its reply together with all supporting documents within a period of two weeks from today - petition disposed off. Issues Involved: Challenge to order dated 20.11.2023 passed under Section 74 (9) of the UPGST Act, 2017. Typographical error in the notice issued on DRC-01. Delay in proceedings and lack of communication of next hearing date. Allegation of ex-parte nature of the order due to breach of natural justice.Challenge to Order dated 20.11.2023: The petitioner contested the proceedings initiated with a notice under Section 74 of the Act on 20.05.2023. A typographical error was noted in the notice issued on DRC-01, wrongly describing it to be issued under Section 74(5) of the Act instead of Section 74(1). The petitioner did file a reply to the notice on 26.07.2023. However, there was a significant delay in further proceedings, with a reminder notice issued on 31.10.2023, granting only five days to furnish documents, and the final order being passed on 20.11.2023 without fixing a further date or giving the petitioner any opportunity.Breach of Natural Justice: The petitioner raised concerns regarding the ex-parte nature of the order, arguing that it was passed hastily without proper communication or allowing sufficient time for compliance. The assessing authority failed to pass an order on the date fixed or communicate the next date, leading to an unfair situation where the petitioner was not given a chance to present their case effectively. The court emphasized the importance of natural justice in ensuring fairness in proceedings and highlighted the lack of provision under the Act for ex-parte proceedings in such circumstances.Conclusion: The High Court set aside the order dated 20.11.2023, directing the petitioner to treat it as a final notice and file a reply with supporting documents within two weeks. The respondent was instructed to fix a hearing date with at least one week's notice to the petitioner and pass a reasoned order after hearing both parties. The court emphasized the need for proper communication, adherence to natural justice principles, and avoiding unnecessary haste in concluding proceedings to uphold fairness and transparency in legal processes.