Assessment and penalty orders quashed for denying personal hearing opportunity under Section 75(4) CGST Act

The AP HC set aside assessment and penalty orders under CGST Act, 2017 for violating natural justice principles. The court held that while Section 67 requires prior authorization for inspection, Section 63 governing assessment of unregistered persons does not mandate such authorization when conducted by proper officer within territorial jurisdiction. However, Section 75(4) mandates personal hearing opportunity before adverse decisions. Since petitioner was only allowed written objections without personal hearing, the orders were quashed. The matter was remanded to respondents for fresh assessment proceedings after granting proper personal hearing opportunity to petitioner.

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Issues:
Challenge to assessment order and penalty order based on lack of adequate opportunity of hearing, requirement of three adjournments before passing orders, authorization for inspection and assessment proceedings, absence of DIN numbers on orders.

Analysis:
1. The petitioner challenged the assessment order and penalty order in two writ petitions, alleging inadequate opportunity of hearing and lack of adjournments as required by Section-75 of the CGST Act, 2017.

2. The petitioner argued that the inspecting officer did not have proper authorization under Section-67 of the CGST Act, 2017 to conduct assessment proceedings. The petitioner contended that the assessing officer should have obtained authorization before passing the assessment order.

3. The petitioner further raised a new ground regarding the absence of Document Identification Number (DIN) on the orders, citing a previous judgment. The petitioner argued that the absence of DIN numbers rendered the orders invalid.

4. The Government Pleader countered the petitioner's contentions by explaining that Section-75 of the CGST Act, 2017 does not mandate three adjournments before passing orders, only limits the number of adjournments. The Pleader also clarified the requirements of authorization under Section-67 and the necessity of DIN numbers on orders for authentication purposes.

5. The Court examined the provisions of Section-67 and Section-63 of the CGST Act, 2017 concerning authorization for inspection and assessment of unregistered persons. The Court found that the assessing officer had proper territorial jurisdiction and did not require additional authorization for assessment.

6. Regarding the issue of adjournments, the Court noted that while Section-75 allows for adjournments, the petitioner did not seek further adjournments after the initial request. However, the Court emphasized the necessity of granting a personal hearing if an adverse decision is contemplated, which was lacking in this case.

7. Consequently, the Court set aside the assessment and penalty orders, directing the respondents to conduct a fresh assessment proceeding after providing the petitioner with a personal hearing. The Court did not delve into the requirement of DIN numbers on orders due to the decision to set aside the orders.

8. The Writ Petitions were disposed of without costs, with directions for a fresh assessment proceeding and personal hearing for the petitioner.

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