Natural justice in GST demands requires proven notice and hearing before any adverse tax order is sustained.

An adverse GST demand cannot be sustained unless prior notice and a real opportunity of hearing are shown. Where the record did not establish service of notice on the taxpayer, and the Department failed to place material proving such service despite relying on GST portal publication, the demand was treated as having been passed in breach of natural justice and was quashed. The Department was permitted to initiate proceedings afresh by issuing notice under Section 73 and then hearing the taxpayer or its authorised representative.

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Issues: Whether the demand order could be sustained when service of notice and opportunity of hearing before passing the adverse order were not shown.

Analysis: The petitioner challenged a demand raised after cancellation of GST registration, asserting that no notice or hearing was afforded. The State relied on publication of demand notices on the GST portal. The record, however, did not establish service of notice on the petitioner, and the respondent also failed to place instructions showing such service. In these circumstances, the adverse demand was treated as having been passed without proper notice and hearing.

Conclusion: The demand order was quashed, and the Department was permitted to issue notice under Section 73 of the Uttarakhand Goods and Services Tax Act, 2017 and proceed afresh after hearing the petitioner or its authorized representative.

Ratio Decidendi: An adverse tax demand cannot be sustained unless prior notice and opportunity of hearing are shown to have been afforded.

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