Order Void Due to Breach of Natural Justice: Case Remanded for Fair Hearing Under CGST/WBGST Act 2017.

The court invalidated the order dated 4th August 2023, citing a breach of natural justice due to the lack of a proper hearing under Section 75(4) of the CGST/WBGST Act, 2017. The matter is remanded to the proper officer for reconsideration, with instructions to provide a fair hearing and conclude proceedings within four weeks. The court has not assessed the merits of the show cause notice, emphasizing impartial adjudication based on evidence. No affidavit-in-opposition was submitted, and the allegations remain unadmitted by the respondents. A certified copy of the order will be issued upon request.

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Issues:
Challenging order under Section 73 of the Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017 for the financial year 2017-18 based on failure of natural justice.

Analysis:
The petition challenges an order dated 4th August, 2023, issued under Section 73 of the Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017 for the financial year 2017-18. The petitioner argues that the proper officer did not provide a proper opportunity of hearing as required by law. Despite a show cause notice issued on 31st January, 2023, the personal hearing was scheduled before the deadline for submitting a response. The petitioner contends that the purpose of a personal hearing is to clarify the response submitted, and without a response, a personal hearing is premature. The petitioner invokes Section 75(4) of the Act, emphasizing that the proper officer must provide an opportunity of hearing regardless of whether the petitioner requested it. The lack of a proper hearing before the order dated 4th August, 2023, renders the entire proceeding flawed due to a violation of natural justice. The petitioner seeks to set aside the order and have the matter remanded for fresh adjudication.

Upon hearing both parties, the court notes that as per Rule 142(3) of the Central Goods and Services Tax Rules, 2017, the assessee is typically given 30 days to respond to a show cause notice under Section 73(1) of the Act. In this case, the petitioner was granted a 30-day window to respond, with the deadline set for 2nd April, 2023. Although the petitioner did not submit a response or request a personal hearing, the proper officer still had an obligation to provide a reasonable opportunity of hearing under Section 75(4) of the Act, especially when an adverse order was anticipated. The court finds that the hearing scheduled for 20th February, 2023, before the response deadline of 2nd April, 2023, did not meet the requirements of a fair hearing as mandated by the Act.

Consequently, the court rules that the order dated 4th August, 2023, is invalid due to a breach of natural justice. The order is set aside, and the petitioner is remanded to the proper officer for reconsideration of the show cause notice dated 31st January, 2023. The proper officer is directed to provide the petitioner with a proper opportunity of hearing, consider any documents presented during the hearing, and conclude the proceedings under Section 73(1) of the Act within four weeks from the date of the court's order. The court clarifies that it has not assessed the merits of the show cause notice and instructs the proper officer to adjudicate the matter impartially based on the available evidence. As no affidavit-in-opposition was submitted, the court deems the allegations in the petition as not admitted by the respondents. Finally, the court orders the issuance of a certified copy of the order to the parties upon request.

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