Tax Liability Order Overturned: Procedural Flaws Expose Need for Fair Hearing and Proper Statutory Compliance Under Section 75(4)

The HC set aside a tax liability order under CGST/KGST Act for 2017-18 and 2018-19, finding procedural irregularities. The court remitted the matter back to the tax authority, directing a fresh consideration and mandating proper hearing opportunity for the petitioner as per Section 75(4) of the KGST Act. The notifications' validity was left open, with instructions for the petitioner to appear before the respondent on a specified date.

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Issues involved: Liability of the petitioner u/s 73(9) of CGST/KGST Act for tax periods of 2017-18 and 2018-19, validity of notifications dated 13.07.2022 and 06.04.2023.

Liability u/s 73(9) of CGST/KGST Act:
The petitioner challenged the liability imposed on them as per the order dated 29.12.2023 u/s 73(9) of the CGST/KGST Act for the tax periods of 2017-18 and 2018-19. The petitioner contended that the clubbing of financial years and passing a common order was impermissible. The petitioner argued that they were not granted an opportunity as required u/s 75(4) of the KGST Act before adverse orders were passed. The court, after hearing the matter, set aside the order and remitted the matter back for fresh consideration, emphasizing the importance of affording the petitioner a proper opportunity for hearing.

Validity of Notifications:
The petitioner also sought setting aside of the notifications dated 13.07.2022 and 06.04.2023. However, the court clarified that the setting aside of the impugned order did not imply a finding on the contention regarding passing a common order for two different financial years. The court focused on the lack of sufficient opportunity granted to the petitioner and directed the matter to be reconsidered afresh by respondent No. 1 in accordance with law. The court allowed dispensation for the production of certified copies of the notifications, as there was no adjudication regarding them in the present case.

Conclusion:
The court set aside the order at Annexure-'H' and remitted the matter to respondent No. 1 for fresh consideration after affording the petitioner an opportunity as per Section 75(4) of the KGST Act. The petitioner was instructed to appear before respondent No. 1 on a specified date without further notice. The court allowed dispensation for the production of certified copies of certain notifications and disposed of the petition, keeping all contentions open for future consideration.

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