Landmark GST Assessment Order Invalidated for Denying Fundamental Hearing Rights and Procedural Fairness

SC quashed assessment order under GST Act due to violation of natural justice principles. The court found that issuing the order on the same day as the petitioner's reply, without providing a personal hearing requested by the petitioner, was procedurally incorrect. The order was set aside, and authorities were directed to conduct a fresh assessment after affording a proper hearing opportunity.

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Issues:
Violation of principles of natural justice in passing assessment order without affording opportunity of hearing.

Analysis:
The writ petition challenged an order passed under Section 73 of U.P.G.S.T./C.G.S.T. Act, 2017 for the financial year 2019-20. The petitioner contended that despite indicating a desire for a personal hearing and specifically requesting an opportunity for the same in the reply to the show-cause notice, the assessment order was issued on the same day as the reply without any hearing. The petitioner argued that this violated principles of natural justice. The court noted that the show-cause notice itself did not provide for a personal hearing, but the petitioner had requested one in their reply. The court emphasized that the authorities were obligated to provide an opportunity for a hearing once it was requested, regardless of any previous opportunities. The court held that passing the assessment order on the same day as the reply, without a hearing, was against natural justice principles.

The government counsel argued that the petitioner had been given several opportunities, but the petitioner's response to the show-cause notice was inadequate, and the assessment order was passed as the limitation for assessment was expiring. The court, however, rejected this argument, stating that the expiry of the assessment limitation period was not a valid reason to deny a hearing. The court emphasized that even if time was a constraint, a short date could have been fixed for a hearing. The court concluded that the assessment order passed on the same day as the reply, without a hearing, could not be sustained.

As a result, the court quashed and set aside the assessment order dated 06.08.2024, directing the authorities to pass a fresh order after affording the petitioner an opportunity for a hearing. The court instructed the petitioner to appear before the authority on a specified date without the need for a fresh notice. The writ petition was allowed based on the above directions and observations.

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