Court Overturns Tax Order Due to Denied Hearing, Reinforcing Natural Justice in GST Assessments.

The HC allowed the writ petition, setting aside the impugned order by the Assistant Commissioner for the tax period April 2018 to March 2019. The Court found that the petitioner was denied a proper opportunity for an oral hearing, violating Section 75(4) of the U.P. GST Act, 2017. It directed the matter to be remitted to the Assistant Commissioner to issue a fresh notice within two weeks, ensuring the petitioner is granted a genuine opportunity for a hearing. This decision underscores the necessity of upholding natural justice principles in tax assessments, ensuring fair and reasoned outcomes.

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Issues:
Challenge to order passed by Assistant Commissioner for tax period April 2018 to March 2019 - Denial of opportunity of oral hearing to the petitioner.

Analysis:
The petitioner challenged an order passed by the Assistant Commissioner, State Tax, for the tax period April 2018 to March 2019, claiming that he was denied the opportunity of oral hearing before the Assessing Authority. The petitioner contended that despite a notice being issued, no opportunity of personal hearing was provided by the Assessing Authority. The petitioner relied on Section 75(4) of the U.P. GST Act, 2017, and referred to a previous judgment by a coordinate bench to support the argument that the Assessing Authority was obligated to provide an opportunity of personal hearing before passing an adverse assessment order, especially in cases involving substantial disputed tax demands.

The petitioner argued that the denial of an opportunity of hearing was contrary to established legal principles and cited relevant legal precedents to support the claim. On the other hand, the revenue's counsel argued that the petitioner had declined the opportunity of hearing by selecting the option 'No' in the reply to the show-cause notice submitted online. However, the Court noted that as per Section 75(4) of the Act, an opportunity of hearing should be granted upon a written request from the person chargeable with tax or penalty, or when any adverse decision is contemplated against such person.

The Court agreed with the petitioner's argument and the precedent set by a coordinate bench, emphasizing that the Assessing Authority was obligated to provide an opportunity of personal hearing before passing an adverse order, regardless of the petitioner's initial choice regarding personal hearing. The Court highlighted the importance of providing a genuine opportunity of hearing, especially in cases involving significant civil liabilities, to ensure the principles of natural justice are upheld.

In conclusion, the Court allowed the writ petition, set aside the impugned order, and directed the matter to be remitted to the Assistant Commissioner to issue a fresh notice to the petitioner within two weeks, ensuring that the petitioner is granted a proper opportunity of hearing for the proceedings to be conducted expeditiously. The judgment reaffirmed the significance of affording a genuine opportunity of hearing to parties involved in tax assessments to uphold the principles of natural justice and ensure reasoned and just outcomes.

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