GST penalty cannot stand without a reasonable hearing; matter remitted for fresh consideration after hearing the assessee.

Penalty under the GST regime was set aside where the assessee claimed prior payment of tax and interest, disputed any fraud, wilful misstatement or suppression, and complained of denial of a reasonable hearing. The HC held that the matter required fresh consideration on the existing factual dispute and remitted it to the assessing authority for re-adjudication after affording an opportunity of hearing.

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Issues: Whether the penalty order passed under Section 73 of the GST regime could be sustained when the petitioner claimed prior payment of tax and interest and complained of denial of personal hearing.

Analysis: The writ petition challenged the impugned order only to the extent of the penalty. The petitioner asserted that the tax and interest had already been paid, that the alleged shortfall arose from a mismatch between returns, and that no fraud, wilful misstatement, or suppression was involved. The Court also noted the explanation that the petitioner could not attend the hearing owing to ill-health and that the official respondent had no serious objection to a fresh opportunity being granted.

Conclusion: The impugned order was set aside and the matter was remitted to the assessing authority for fresh orders after affording the petitioner an opportunity of hearing.

Final Conclusion: The penalty determination was not upheld on the existing record and the dispute was directed to be reconsidered afresh in accordance with law after hearing the petitioner.

Ratio Decidendi: An order imposing penalty under the GST regime cannot be sustained where the affected party is denied a reasonable opportunity of hearing and the matter warrants fresh consideration on the existing factual dispute.

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