2024 (9) TMI 1002 - HC - GST

Tax Proceeding Overturned: Procedural Defect in Section 75(4) Hearing Requires Fresh Review with Petitioner's Full Participation

Arup Mallick Versus Commissioner, Commercial Taxes and State Tax, & Ors.

HC found a procedural violation in tax proceedings where personal hearing under Section 75(4) of CGST/WBGST Act was not properly conducted. The court set ... Violation of principles of natural justice - failure on the part of the respondents to afford the petitioner with an opportunity of personal hearing in terms of the provisions contained in Section 75 (4) of the CGST/WBGST Act, 2017 - HELD THAT:- It may be noted that provisions of Section 75 (4) of the said Act contemplates affording an opportunity of hearing where a request is received in writing from the person chargeable with tax, or penalty or where any adverse decision is contemplated against such person. Admittedly, in this case, adverse decision was contemplated against the petitioner. The order impugned dated 13th December, 2023 passed under Section 73 of the said Act for the tax period July, 2017 to March, 2018 stands vitiated on the ground of failure to comply with statutory provision. There is also some explanation on the part of the petitioner which prevented the petitioner from filing his response. The impugned order is set aside and the matter is remanded back to the proper officer - Petition disposed off by way of remand. Issues:Challenging failure to provide personal hearing under Section 75(4) of CGST/WBGST Act, 2017.Analysis:The petitioner filed a writ petition challenging the failure of the respondents to provide an opportunity for a personal hearing as required by Section 75(4) of the CGST/WBGST Act, 2017. The petitioner received a show cause notice but was not given a chance for a personal hearing despite being allowed to submit a response. The petitioner's advocate argued that the absence of a personal hearing violated the statutory provision. The final order issued by the proper officer for the tax period in question was contested on this ground.Analysis:The Government Pleader representing the State respondents contended that the petitioner was indeed given an opportunity for a personal hearing through the show cause notice but chose not to respond. According to the Government Pleader, since the petitioner did not submit a response, there was no obligation on the part of the respondents to provide another opportunity for a hearing. The Government Pleader asserted that there was no irregularity in the order and no need for interference.Analysis:After hearing arguments from both sides and reviewing the evidence, the court noted that the petitioner had been served with a show cause notice but did not respond, citing illness during the relevant period as the reason. The court acknowledged the statutory requirement under Section 75(4) of the Act to provide a hearing when an adverse decision is contemplated against the taxpayer. As the petitioner's response was not received and considering the explanation for the delay, the court found the order issued by the proper officer to be flawed due to non-compliance with the statutory provision.Analysis:Consequently, the court set aside the impugned order and remanded the matter back to the proper officer. The petitioner was granted 15 days to file a response, and the proper officer was directed to re-adjudicate the issues after providing a personal hearing to the petitioner or their authorized representative. The court emphasized the need for expeditious disposal of the proceedings, ideally within eight weeks from the date of the court's order. Additionally, the court clarified that the petitioner had not raised any other challenges in the petition.Analysis:In conclusion, the court disposed of the writ petition with the provided directions and observations. It also mentioned that urgent certified copies of the order would be made available to the parties upon completion of necessary formalities.