Developer's GST Assessment Challenged: Procedural Fairness Prevails with Mandatory Personal Hearing and Fresh Evaluation

HC ruled that assessment orders for 2019-22 were set aside due to denial of personal hearing. Developer challenging GST rate application was directed to deposit 5% of disputed tax demand. Respondent must provide reasonable opportunity, conduct fresh hearing, and issue new orders within three months. Case disposed without costs, ensuring procedural fairness in tax assessment.

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Issues involved: Assessment orders for periods 2019-20, 2020-21, and 2021-22 challenged on the basis of denial of reasonable opportunity.

Details of the Judgment:

1. The petitioner, a developer availing benefits under Notification No.03/2019, was subjected to inspection and subsequent show cause notices due to which impugned orders were issued. The primary contention was the denial of a personal hearing and non-reference to petitioner's replies in the orders.

2. The petitioner's counsel argued that a personal hearing was requested but not granted, and the impugned order did not consider the petitioner's replies adequately. It was also contended that applying GST at 5% for non-compliance with Notification No.3/2019 exceeded jurisdiction, and the show cause notice lacked essential ingredients under Section 74 of GST enactments.

3. The Additional Government Pleader highlighted the petitioner's failure to provide evidence of projects qualifying as affordable housing and non-production of relevant documents despite agreements. The impugned order was defended for containing reasons for rejecting the request to impose GST at 1% instead of 5%.

4. The Court observed that while the impugned order referred to the petitioner's contentions, a personal hearing requested in the final reply was not granted, warranting interference with the orders.

5. Despite the need for remanding the matter considering revenue interest, the impugned orders were set aside with the condition that the petitioner remits 5% of the disputed tax demand for each assessment period within two weeks. The respondent was directed to provide a reasonable opportunity, including a personal hearing, and issue fresh orders within three months.

6. The Court disposed of the cases on the mentioned terms without costs, closing related applications.

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