2024 (10) TMI 204 - HC - GST

Tax Order Quashed: Procedural Flaws Invalidate GST Assessment, Mandate Fresh Hearing with Proper Reasoning

HC allowed writ petition challenging tax order under GST Act. The court found procedural irregularities and violation of natural justice principles. Order ... Violation of principles of natural justice - opportunity of personal hearing in adjudication proceedings - quashing of order passed without personal hearing - self-imposed bar of alternative remedy - remand for fresh reply, hearing and reasoned orderViolation of principles of natural justice - opportunity of personal hearing in adjudication proceedings - quashing of order passed without personal hearing - self-imposed bar of alternative remedy - remand for fresh reply, hearing and reasoned order - Impugned adjudication order passed under Section 74 of the Uttar Pradesh GST Act was in gross violation of natural justice and was liable to be quashed; the matter is to be remanded for fresh opportunity to file reply, personal hearing and a reasoned order. - HELD THAT: - The Court held that the factual matrix mirrors a coordinate Bench decision which emphasised that before passing any adverse adjudication order personal hearing must be offered to the noticee, and that procedural practices such as recording 'N.A.' for hearing date/time or fixing dates so that reply is not prior to personal hearing are impermissible. Where a noticee has not been afforded a proper opportunity of personal hearing (absent a valid waiver or where the noticee has not availed the hearing), the order passed in such circumstances cannot stand as it offends fundamental principles of natural justice. The self-imposed bar of alternative remedy cannot be allowed to validate an order tainted by such denial of hearing. Applying those principles to the present record, the impugned order dated 29.4.2024 was quashed. The Court directed that the officer concerned grant the petitioner a fresh opportunity to file a reply, thereafter fix a date for personal hearing and pass a reasoned order, completing the exercise within two months from the date of the order. [Paras 4, 5]Impugned order quashed; matter remanded to allow fresh filing of reply, personal hearing and passage of a reasoned order within two months.Final Conclusion: The writ petition is allowed to the extent that the order dated 29.4.2024 is quashed and set aside; respondent-officer is directed to permit a fresh reply, afford a personal hearing and thereafter pass a reasoned adjudication order within two months. The petition is disposed of. Issues:Writ petition under Article 226 challenging an order passed under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017.Analysis:The judgment delivered by the High Court pertained to a writ petition filed under Article 226 of the Constitution of India challenging an order issued by the Deputy Commissioner, State Tax, Karvi Sector-1, Banda, Uttar Pradesh. The petitioner had expressed grievance regarding the order dated 29.4.2024 passed by the respondent under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner decided not to press the writ petition on Prayer No. 2 and focused only on Prayer No. 1. The Court noted that the factual scenario was akin to a previous judgment of a coordinate Bench in Mahaveer Trading Company vs. Deputy Commissioner State Tax and another. The Court emphasized the importance of providing a personal hearing to the noticee before passing any adverse order in an adjudication proceeding. It was highlighted that the impugned order was in violation of fundamental principles of natural justice, and the self-imposed bar of an alternative remedy could not be applied in such circumstances. The Court held that the impugned order was unsustainable in the eyes of the law due to the procedural irregularities and lack of adherence to natural justice principles.The Court, after perusing the record and finding similarities with the aforementioned judgment, quashed and set aside the impugned order dated 29.4.2024. A direction was issued to the concerned officer to provide the petitioner with another opportunity to file a fresh reply, schedule a date for a hearing, and subsequently pass a reasoned order. The Court mandated that this entire process should be completed within a period of two months from the date of the judgment. The writ petition was disposed of based on these findings and directions.