2024 (10) TMI 669 - HC - GST

Tax Assessment Order Quashed: Procedural Fairness Prevails, Hearing Rights Upheld Under Section 75(4) of MGST Act

ATV Projects India Limited Versus Assistant Commissioner of State Tax, Investigation, Maharashtra, Commissioner of State Tax, Maharashtra, Joint Commissioner of State Tax (Appeals), Maharashtra, The State of Maharashtra, Superintendent, Range I, Dn-V, Mumbai, Joint Commissioner of State Tax (ADM) Bhayandar, Additional Commissioner of Central Tax, Mumbai.

HC of Bombay quashed tax assessment order for Financial Year 2017-2018 due to violation of Section 75(4) of MGST Act. The order was set aside because the ... Violation of principles of natural justice - impugned order has been made without hearing the Petitioner - breach of the provisions of Section 75 (4) of the MGST Act - HELD THAT:- Section 75 (4) of the MGST Act contemplates the opportunity of hearing where a request is received in writing from the person chargeable with tax or penalty, or any adverse decision is contemplated against such person. The Petitioner, in this case, had requested in writing an opportunity for a hearing. In any event, the impugned order is adverse to the interest of the Petitioner. On both these counts, the impugned order should have been preceded by an opportunity of hearing. On this short ground, the impugned order must be set aside. In Kuehne Nagel Private Limited [2023 (12) TMI 512 - BOMBAY HIGH COURT] and Hydro Pneumatic Accessories India Pvt. Ltd. [2023 (12) TMI 666 - BOMBAY HIGH COURT], Coordinate Benches of this Court, in almost identical circumstances, have interfered with orders that were made without compliance with the requirement of Section 75 (4) of the MGST Act. Even in those cases, no opportunity for a hearing was granted to the Petitioners. This was considered sufficient to set aside the orders impugned in those Petitions and for a remand to make fresh orders after hearing the Petitioners. The impugned order dated 17 January 2024 is quashed and set aside - the recovery notice dated 6 September 2024 based upon the impugned order will not survive - petition disposed off. Issues:Challenge to order under MGST Act for Financial Year 2017-2018 without hearing the Petitioner, Breach of Section 75(4) of MGST Act, Opportunity of hearing denied, Compliance with statutory provisions, Precedent of orders set aside for lack of hearing, Quashing of impugned order, Setting aside recovery notice, Granting opportunity of hearing, Timeframe for Assessment Order, All contentions left open.The judgment delivered by the High Court of Bombay pertains to a petition challenging an order made under the Maharashtra Goods and Service Tax Act, 2017 for the Financial Year 2017-2018. The primary contention raised was that the order was issued without granting the Petitioner an opportunity to be heard, which was deemed a violation of Section 75(4) of the MGST Act. The Petitioner had explicitly requested a hearing in their reply to the show cause notice. The Court noted that the denial of the opportunity to be heard, despite the Petitioner's request, was not in line with the statutory provision. The Court emphasized that the consideration of the Petitioner's reply did not substitute the mandatory opportunity of being heard as prescribed by law.Section 75(4) of the MGST Act mandates that an opportunity of hearing shall be granted upon a written request from the person chargeable with tax or penalty or when an adverse decision is contemplated against such person. In the present case, the Petitioner had made a written request for a hearing, and the impugned order was adverse to their interest. Therefore, the Court held that the order should have been preceded by a proper opportunity of hearing. Citing precedent cases where similar orders were set aside for lack of compliance with Section 75(4) of the MGST Act, the Court emphasized the importance of adhering to procedural fairness and set aside the impugned order.Consequently, the Court quashed and set aside the impugned order dated 17 January 2024 and the recovery notice based on it. The 1st Respondent was directed to grant the Petitioner an opportunity of hearing before making the Assessment Order in accordance with the law. The Court set a deadline for completing this exercise before 31 December 2024 to ensure expeditious resolution. All contentions of the parties were expressly left open, and no costs were awarded in the matter.---