Natural justice in GST assessment led to remand after denial of effective hearing on input tax credit claim.

An assessment under the GST regime was interfered with because the assessee was not afforded an effective opportunity of hearing. Although the initiation notice was uploaded on the GST portal and a show-cause notice with a reminder for personal hearing was issued, the record did not show meaningful hearing before confirmation of the demand relating to input tax credit on purchase of a car. The court held that this procedural deficiency deprived the assessee of an opportunity to explain that the purchase was in the course of business. The assessment order was set aside and the matter remanded for fresh consideration with liberty to file a reply and a direction to grant reasonable opportunity, including personal hearing, on payment of 10% of the disputed demand.

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Issues: Whether the assessment order was liable to be set aside for breach of principles of natural justice owing to alleged non-service of notice and denial of effective hearing, and whether the matter warranted remand.

Analysis: The notice initiating proceedings was stated to have been uploaded on the GST portal, and the record showed a show cause notice followed by a reminder for personal hearing. The confirmed demand related to Input Tax Credit on purchase of a car. Since the petitioner had not been effectively heard, it was held that the petitioner was deprived of an opportunity to explain that the purchase was in the course of business. For that limited reason, interference was warranted and the matter was directed to be reconsidered on terms.

Conclusion: The assessment order was set aside and the matter was remanded for fresh consideration subject to payment of 10% of the disputed tax demand, with liberty to file a reply and with a further direction to afford reasonable opportunity, including personal hearing, before passing a fresh order.

Ratio Decidendi: Where an assessee is not afforded an effective opportunity of hearing in proceedings under the GST regime, the assessment order can be interfered with and remanded for fresh adjudication after ensuring reasonable opportunity and compliance with procedural fairness.

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