Fair Hearing Crucial: GST Assessment Orders Invalidated for Denying Taxpayer's Right to Personal Representation and Opportunity to Be Heard

The SC found a breach of natural justice in GST assessment orders due to lack of personal hearing as mandated by statutory provisions. The court set aside the original assessment and recovery orders, remanding the matter for reconsideration with directions to provide a fair hearing within two months. Recovery notices were also nullified, with existing stay of proceedings maintained for pending appellate matters.

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Issues involved: Challenge to assessment orders for the assessment periods 2017-18 and 2018-19 on the ground of breach of principles of natural justice.

Summary:

Issue 1: Compliance with principles of natural justice
The petitioner challenged the assessment orders for the mentioned periods citing a breach of natural justice principles. The petitioner responded to the show cause notice, but a personal hearing was not provided by the respondent as required by subsection (4) of Section 75 of applicable GST enactments. The Court found that the failure to offer a personal hearing contravened the statutory prescription, leading to interference with the impugned orders. Consequently, the orders were set aside, and the matters were remanded for reconsideration, with directions to provide a reasonable opportunity to the petitioner, including a personal hearing, and to issue fresh orders within two months.

Issue 2: Recovery notice in relation to assessment orders
As the assessment orders preceding the recovery notice were set aside, the recovery notice was also set aside. It was noted that the recovery notice pertained not only to the impugned orders but also to orders subject to pending appellate proceedings. Since a pre-deposit was made in accordance with Section 107 of applicable GST enactments, the stay of recovery remained in force concerning the appellate proceedings. Consequently, the Court disposed of the relevant writ petitions without any order as to costs, and the connected miscellaneous petitions were closed.

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