2024 (6) TMI 1309 - HC - GST

Tax Orders Invalidated: Procedural Defect in Personal Hearing Violates GST Law Section 75(4), Mandating Fair Reconsideration

SC found tax orders invalid due to lack of mandatory personal hearing under Section 75(4) of GST law. Despite respondent's claim of hearing opportunity, ... Mandatory personal hearing under Section 75(4) - failure to consider submissions and record findings - setting aside and remand for fresh considerationMandatory personal hearing under Section 75(4) - failure to consider submissions and record findings - setting aside and remand for fresh consideration - Impugned orders confirmed adverse tax proposals without affording the petitioner a personal hearing and without recording findings on the petitioner's submissions. - HELD THAT: - The Court found that under sub section (4) of Section 75 a personal hearing is mandatory not only when requested but also whenever an adverse order is proposed to be issued. Although the petitioner had replied to the show cause notice and contended that the ingredients of Section 74 were not satisfied, those submissions were not considered and no findings were recorded. The orders in original confirming the tax proposals were passed without providing the petitioner a personal hearing, thereby infringing the statutory prescription. On that ground the impugned orders cannot be sustained. The Court therefore set aside the orders in original dated 19.09.2023 and remitted the matters for reconsideration, directing the respondent to afford the petitioner a reasonable opportunity, including a personal hearing, and to pass fresh orders within three months from receipt of a copy of the order.Impugned orders set aside and remitted for fresh consideration with a direction to provide a reasonable opportunity including a personal hearing and to pass fresh orders within three months.Final Conclusion: Writ petitions allowed to the extent that the orders in original are quashed and the matters are remanded for fresh consideration after granting the petitioner a reasonable opportunity, including a personal hearing; fresh orders to be passed within three months; no order as to costs. Issues:Petitioner not provided personal hearing in orders and rectification petitions.Analysis:The judgment dealt with writ petitions challenging orders and rectification orders due to the lack of a personal hearing for the petitioner. The petitioner, engaged in executing civil work contracts, received a show cause notice which was replied to on specific dates. Orders in original were issued subsequently, and rectification petitions were filed and rejected. The petitioner argued that Section 74 requirements were not met, and their reply was not considered, with no findings recorded. The absence of a personal hearing was highlighted as a violation of Section 75(4) of GST enactments.The learned counsel for the petitioner emphasized the failure to consider the petitioner's contentions and the absence of a personal hearing, as required by law. On the other hand, the Additional Government Pleader contended that a personal hearing was granted during the disposal of rectification petitions, noting that the petitioner did not request a personal hearing and indicated no preference for it. The court underscored that under Section 75(4) of GST enactments, a personal hearing is mandatory when an adverse order is proposed, regardless of a specific request. Since the tax proposals were confirmed without granting the petitioner a personal hearing, the court deemed the orders unsustainable.Consequently, the impugned orders were set aside, and the matters were remanded for reconsideration. The respondent was directed to afford the petitioner a reasonable opportunity, including a personal hearing, and issue fresh orders within three months. The writ petitions were disposed of without costs, and connected miscellaneous petitions were closed. The judgment emphasized the importance of adhering to procedural requirements, particularly regarding personal hearings, in tax matters to ensure fairness and compliance with statutory provisions.