Landmark Ruling: GST Order Quashed for Denying Hearing Rights, Authority Directed to Reconsider Petition with Proper Procedural Fairness

HC allowed the writ petition challenging a GST Act order. The court found a violation of natural justice by denying personal hearing to the petitioner. Following precedent from Mahaveer Trading Company, the HC quashed the impugned order and directed the authority to provide a fresh opportunity for hearing and pass a reasoned order within two months.

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Issues:
Violation of natural justice in passing the impugned order under the UPGST Act.

Analysis:
The High Court heard a writ petition under Article 226 of the Constitution of India where the petitioner challenged an order passed by the respondent under the UPGST Act. The Court noted that the factual matrix was similar to a previous judgment of Mahaveer Trading Company. In that judgment, it was emphasized that personal hearing must be offered to the noticee before any adverse order is passed in an adjudication proceeding. Denying the opportunity of personal hearing would violate fundamental principles of natural justice. The Court held that the impugned order was passed in gross violation of natural justice and could not be sustained. The self-imposed bar of alternative remedy was deemed counterproductive to the interest of justice in this case, as the appeal authority did not have the authority to remand the proceedings.

The Court, upon reviewing the record, found no reason to deviate from the principles established in the Mahaveer Trading Company case. Consequently, the Court quashed and set aside the impugned order dated June 21, 2024. The officer concerned was directed to grant the petitioner another opportunity to file a fresh reply, fix a date of hearing, and pass a reasoned order. The Court mandated that this entire process should be completed within two months from the date of the judgment. Finally, the writ petition was disposed of by the Court.

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