Taxpayer Wins Challenge Against Arbitrary Tax Orders, Secures Right to Personal Hearing and Bank Account Release

HC allowed writ petition challenging tax orders. Found respondents violated natural justice by not providing physical hearing notice. Ordered first respondent to issue fresh notice, conduct personal hearing, and pass appropriate orders within 3 months. Lifted bank account attachment, subject to petitioner paying Rs. 5,000 for procedural delay. Disposed of petition without additional costs.

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Issues:
Challenging impugned orders dated 29.04.2024 & 03.09.2024, petitioner filed Writ Petitions regarding discrepancies in returns filed for financial year 2018-2019. Petitioner failed to appear for personal hearing, leading to passing of impugned orders. Petitioner sought opportunity for personal hearing and to participate in proceedings.

Analysis:
The petitioner, engaged in providing various services to educational institutions, challenged impugned orders alleging discrepancies in returns filed for the financial year 2018-2019. The first respondent issued a show cause notice, to which the petitioner replied. Subsequently, the second respondent issued a summary show cause notice for personal hearing, which the petitioner missed due to a change in consultants. The impugned order demanded substantial payments and led to an attachment order on the petitioner's bank account. The petitioner argued that the physical version of the order was not served, and they were unaware of the proceedings, thus seeking an opportunity for a personal hearing.

The Government Advocate representing the respondents acknowledged the petitioner's reply but emphasized the petitioner's failure to attend the personal hearing as the reason for the impugned orders. The Government Advocate contended that the petitioner's explanation of a new consultant was not acceptable, urging the court to pass appropriate orders.

Upon hearing both parties and examining the evidence, the Court found that while the petitioner responded to the show cause notice, they missed the personal hearing due to notices being uploaded on the GST portal without physical copies being served. The Court held that the impugned orders were passed without affording the petitioner the opportunity for a personal hearing, violating principles of natural justice. Consequently, the Court deemed it necessary to provide the petitioner with a chance to establish their case on merits and in accordance with the law.

In light of the above, the Court set aside the impugned orders and remanded the matter to the first respondent for fresh consideration, subject to a payment of Rs. 5,000 for delay. The first respondent was directed to issue a notice for a personal hearing and pass appropriate orders within three months. Additionally, the attachment on the petitioner's bank account was lifted. The Court concluded by disposing of the Writ Petitions without any costs, and the connected miscellaneous petitions were closed.

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