Tax Recovery Order Quashed: Natural Justice Violated, Personal Hearing Mandated Under Section 75(4) of GST Act

HC allowed the petitioner's challenge to the tax recovery order. The court found a violation of natural justice under Section 75(4) of GST Act, as no personal hearing was provided. The impugned order was set aside, the matter remanded for reconsideration, and bank account attachment directed to be released. The 1st respondent was ordered to provide a personal hearing within 14 days.

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Issues:
Challenge to impugned order dated 25.04.2024 passed by the 1st respondent regarding tax liabilities and recovery.

Analysis:
The petitioner challenged the impugned order dated 25.04.2024 passed by the 1st respondent, alleging a violation of principles of natural justice. The petitioner contended that the respondent had uploaded show cause and reminder notices on specific dates, to which the petitioner responded accordingly. However, the impugned order was passed without granting an opportunity for a personal hearing, contrary to Section 75(4) of the Goods and Services Tax Act, 2017. The respondent had recovered a substantial sum from the petitioner's bank account through attachment. The petitioner sought the court to set aside the impugned order based on the lack of opportunity for a personal hearing.

The Additional Government Pleader for the 1st respondent admitted that no personal hearing was provided to the petitioner before passing the impugned order. He requested the court to remit the matter back to the respondent for reconsideration. The court noted that the lack of personal hearing before passing the impugned order violated the provisions of Section 75(4) of the GST Act, which mandates providing an opportunity for a personal hearing before passing an adverse order. The court found it necessary to grant the petitioner an opportunity to establish their case on merits, especially since a significant amount had already been recovered from the petitioner.

The court, after hearing both parties and examining the record, concluded that the impugned order was passed in violation of principles of natural justice. Consequently, the court set aside the impugned order dated 25.04.2024 and remanded the matter to the 1st respondent for fresh consideration. The respondent was directed to consider the petitioner's replies and provide a clear notice for a personal hearing within 14 days. The court also ordered the immediate release of the attachment on the petitioner's bank account upon the production of a copy of the order. The writ petition was disposed of with no costs, and the connected miscellaneous petitions were closed.

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