High Court Quashes GST Order for Denying Hearing Rights, Directs Appellate Authority to Provide Fair Opportunity Under Natural Justice Principles

HC allowed petitioner's writ challenging GST order due to violation of natural justice principles. The court found that respondent failed to provide opportunity of hearing as mandated under GST Act. HC directed appellate authority to grant personal hearing, condoned delay in appeal filing, and stayed recovery proceedings pending appeal resolution.

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Issues:
The petitioner challenged the impugned order dated 17.01.2024 passed by respondent no.3 on the ground of lack of opportunity of hearing as per Section 107(8) under the Central Goods and Services Tax, 2017 and the West Bengal Goods and Services Tax, 2017. The petitioner also contested the order dated 11.08.2023 raised under Section 74 of the GST Act demanding an amount of Rs.40,73,996.84 for the period April 2022 to March 2023 in violation of Section 74 of the GST Act.

Opportunity of Hearing Issue:
The petitioner argued that the show cause notice did not specify the date, time, and venue of personal hearing, which violated the principles of natural justice. The petitioner further contended that the order passed on 11.08.2023 under Section 74 of the GST Act did not afford any opportunity of personal hearing, leading to a violation of natural justice. The petitioner's appeal was dismissed on the ground of limitation by the appellate authority on 17.01.2024.

Legal Precedents and Rulings:
The petitioner cited the judgment of the Division Bench of Calcutta High Court in MAT No. 205 of 2023, emphasizing the mandatory nature of granting personal hearing under Section 75(4) of the Central Goods and Services Tax, 2017. The court held that when an adverse decision is contemplated against a person, the authority must provide an opportunity of personal hearing even without a formal request. Additionally, the petitioner referenced another judgment in MAT 1361 of 2023 to support the argument that delay can be condoned if the principles of natural justice are violated by not providing an opportunity of hearing.

Delay in Filing Appeal Issue:
The respondent acknowledged that delay can be condoned if the appeal is time-barred, citing the decision in MAT 81 of 2022. The court applied the principles established in previous rulings and found that the appellate authority had indeed violated the principle of natural justice by not granting an opportunity of hearing to the petitioner. Consequently, the delay in filing the appeal was condoned, and the writ petition was allowed by setting aside the impugned order dated 17.01.2024.

Court Decision and Directions:
The court directed the appellate authority to provide a personal hearing to the petitioner and to decide the appeal on its merits. Due to the petitioner's deposit of 10% of the disputed tax amount as a pre-deposit, there was a stay of the recovery proceedings until the appeal case is resolved. With these directions, the court disposed of the present writ petition.

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