Assessment order set aside for lack of personal hearing under Section 75(4); matter remanded pending 10% tax payment

The HC set aside the impugned assessment order dated 23.04.2024 for failure to afford a personal hearing under Section 75(4) of the GST Act and remanded the matter to the 1st respondent for fresh consideration. The remand is subject to the condition that the petitioner pay 10% of the disputed tax within two weeks from 18.02.2025, and the setting aside of the impugned order will take effect from the date of such payment. The petition is disposed of by remand.

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ISSUES PRESENTED and CONSIDERED:1. Whether the respondent provided sufficient opportunity to the petitioner prior to the passing of the impugned orderRs. 2. Whether the lack of personal hearing before passing the impugned order violates principles of natural justiceRs.ISSUE-WISE DETAILED ANALYSIS:Issue 1: Opportunity Provided Prior to Impugned Order- Relevant legal framework and precedents: Section 75(4) of the GST Act, 2017 requires providing sufficient opportunity to the petitioner before passing an adverse order.- Court's interpretation and reasoning: The Court found no fault on the respondent's part regarding the opportunity for filing a reply. The consultant of the petitioner failed to provide an effective reply, leading to the passing of the impugned order.- Key evidence and findings: The reply filed by the petitioner was deemed ineffective as it only included Form GSTR-9 and GSTR-9C.- Application of law to facts: Despite the respondent providing sufficient opportunity, the lack of an effective reply resulted in the impugned order.- Conclusions: The Court upheld the respondent's actions regarding the opportunity for filing a reply.Issue 2: Lack of Personal Hearing Violating Principles of Natural Justice- Relevant legal framework and precedents: Principles of natural justice require providing a personal hearing before passing an adverse order.- Court's interpretation and reasoning: The Court noted the absence of a personal hearing for the petitioner after the filing of the reply. This omission was deemed a violation of Section 75(4) of the GST Act and principles of natural justice.- Key evidence and findings: The impugned order was passed without granting the petitioner a personal hearing, contrary to legal requirements.- Application of law to facts: The Court found the lack of a personal hearing to be a clear violation of procedural fairness.- Conclusions: The Court set aside the impugned order and remanded the matter to the respondent for fresh consideration, emphasizing the need for a personal hearing.SIGNIFICANT HOLDINGS:- The Court's ruling set aside the impugned order and remanded the matter to the respondent for fresh consideration, with specific conditions for the petitioner to follow.- The core principle established is the importance of providing a fair opportunity for the petitioner to respond before passing adverse orders, in line with statutory requirements and principles of natural justice.Overall, the Court's decision focused on procedural fairness, emphasizing the necessity of complying with legal provisions and ensuring a fair process for all parties involved.

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