Tax Order Invalidated: GST Authorities Must Provide Fair Hearing and Reasoned Decision on Petitioner's Objections

HC upheld petitioner's challenge to tax order under GST Act, finding significant procedural violations. The court invalidated the order due to lack of proper hearing and breach of natural justice principles. Order was set aside, allowing petitioner to submit fresh objections before tax authorities, which must be considered on merit through a reasoned decision.

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Issues Involved: Challenge to the order dated 23.12.2023 passed under Section 73(9) of the Uttar Pradesh Goods and Service Tax Act, 2017.

Violation of Section 11 of the Goods and Services Tax (Compensation to States) Act, 2017:
The petitioner contended that no order should have been passed under the provisions of the State Act as per Section 11 of the Central Goods and Services Tax Act, 2017. It was argued that the impugned order was unsustainable due to a gross violation of Section 75(4) of the Central Act, where the petitioner was not provided with a proper opportunity for a personal hearing as required by law.

Violation of Principles of Natural Justice:
The petitioner raised objections regarding the impugned order being passed during the pendency of an earlier writ petition and the lack of adherence to principles of natural justice. It was highlighted that the notice preceding the impugned order did not provide adequate details for the petitioner to exercise their right to reply in accordance with the law. The Court acknowledged the violation of principles of natural justice as incorporated in Section 75(4) of the Central Act and the State Act.

Adjudication without Proper Opportunity of Personal Hearing:
The Court noted that the impugned order was passed without granting the petitioner a proper opportunity for a personal hearing, which is essential for fair adjudication proceedings. It was emphasized that before any adverse order is passed, a personal hearing must be offered to the noticee, and the denial of such an opportunity goes against fundamental principles of natural justice. The Court found the impugned order to be in violation of these principles and set it aside.

Conclusion:
The High Court allowed the writ petition, setting aside the impugned order due to violations of fundamental principles of natural justice. The petitioner was given the option to raise objections before the respondent-authority in accordance with the law, and any objections raised would be considered on their own merits by a reasoned and speaking order.

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