2025 (2) TMI 1007 - HC - GST

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 ... Violation of principles of natural justice - no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order - petitioner's consultant had simply uploaded the Form GSTR-9 and Form GSTR-9C instead of filing a proper reply - HELD THAT:- As far as the opportunity for filing of reply is concerned, this Court does not find any fault on the part of the respondent. Though sufficient opportunity was provided, the consultant of the petitioner had failed to file any effective reply to decide the matter. Under these circumstances, the impugned order came to be passed by the 1st respondent. As far as the opportunity of personal hearing is concerned, no such opportunity was provided to the petitioner subsequent the filing of reply. As per the provisions of Section 75(4) of the GST Act, if the 1st respondent is intend to pass any adverse order, it is mandatory for them to provide sufficient opportunity to the petitioner subsequent to the filing of reply and prior to the passing of assessment order. However, in this case, the impugned order has been passed against the petitioner without providing any such opportunity of personal hearing, which is not only contrary to the provisions of Section 75(4) of the GST Act, but also in violation of principles of natural justice. The impugned order dated 23.04.2024 is set aside and the matter is remanded to the 1st respondent for fresh consideration, on condition that the petitioner shall pay 10% of disputed tax amount, to the respondent within a period of two weeks from today (18.02.2025) and the setting aside of the impugned orders will take effect from the date of payment of the said amount - Petition disposed off by way of remand. 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.