Opportunity of Hearing under CGST Act breached by absence of personal hearing; order set aside and remitted for hearing.

Non-compliance with statutory hearing requirements under the CGST framework was central: the authority issued an adverse order without granting the comprehensive personal hearing mandated by Section 75(4), defeating principles of natural justice; consequence-the impugned order was set aside. The court treated prior availability of an alternate remedy as insufficient to cure the natural justice breach when statutory hearing provisions were not observed; consequence-the appeal was entertained despite alternate remedy arguments. On statutory compliance, failure to follow sub Section (4) and (5) procedures vitiated the adjudication; consequence-the matter was remitted for personal hearing before the Joint Commissioner on the directed date.

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Issues Involved:
1. Alternate Remedy
2. Opportunity of Hearing
3. Principles of Natural Justice
4. Statutory Compliance

Summary:

1. Alternate Remedy:
The appeal is against the Order dated 21.03.2024 in Writ Petition (Tax) No. 42 of 2024, where the appellant was non-suited on the ground of alternate remedy.

2. Opportunity of Hearing:
The appellant, a regular assessee, was served a notice u/s 73(1) of the CGST Act, 2017, for a contemplated tax not paid or short paid on 29.09.2023. The appellant sought an extension for reply, but an adverse order was passed on 29.12.2023 without granting an opportunity of hearing, violating Section 75(4) of the CGST Act. The appellant argued that the principles of natural justice were defeated and relied on the Supreme Court's decision in Kalpraj Dharamshi v. Kotak Investment Advisors Limited, which allows invoking jurisdiction under Article 226 of the Constitution when natural justice is violated.

3. Principles of Natural Justice:
The court emphasized that Section 75(4) mandates a comprehensive opportunity of hearing. The show cause notice indicated a reply date of 30.10.2023, but personal hearings were scheduled before this date, which is against the normal procedure and legislative intent. The Supreme Court has held that a meaningful opportunity of hearing must be provided, as seen in Umanath Pandey v. State of UP and Dharampal Satyapal Ltd. v. CCE. Oral hearings are crucial for adjudication, as highlighted in Automotive Tyre Manufacturers Assn. v. Designated Authority and the US case of Goldberg v. Kelly.

4. Statutory Compliance:
The court found that sub-Section 4 of Section 75 of the CGST Act was not complied with before passing the order dated 29.12.2023. The Supreme Court in Kalpraj Dharamshi stated that breach of natural justice allows invoking High Court jurisdiction under Article 226. The court disagreed with the Single Bench's order and set it aside, emphasizing that statutory mandates of hearing must be upheld.

Conclusion:
The court allowed the appeal, directing the parties to appear before the Joint Commissioner of State Tax on 08.05.2024 for a personal hearing as per the mandate of sub-Sections (4) and (5) of Section 75 of the CGST Act.

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