2025 (3) TMI 546 - HC - GST

Orders Overturned for Violating Natural Justice; Fresh Orders to Follow with Fair Hearing Under CGST Act Section 73.

Heaven Gift & Toys (Represented By Sri. P.I. Binson, Managing Partner) Versus State Tax Officer, Ernakulam, Assistant Commissioner, Tax Payer Service Circle, State Goods & Services Tax Department, Adimali, The Central Board Of Indirect Tax And Customs.

The HC set aside the impugned orders due to violations of natural justice principles, specifically the lack of a fair hearing and failure to inform the ... Violation of principles of natural justice - issuance of the show cause notice and the subsequent orders without providing the petitioner an opportunity for a personal hearing - HELD THAT:- Instead of orders being passed by the same officer who issued the show cause notice, due to administrative arrangements, the files were apparently reassigned to the second respondent, who subsequently issued the impugned order Ext.P5. Curiously, it was never informed to the petitioner that there was such a re-assignment. Petitioner was not given any opportunity of hearing as well, before the second respondent. Since the impugned order was passed by the second respondent without hearing the petitioner or even granting him an effective opportunity to appear before the second respondent, Ext.P5 order is vitiated due to violation of principles of natural justice. Ext.P5 order dated 06.04.2024 as well as Ext.P7 order, are set aside - Petition allowed. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment include:Whether the issuance of the show cause notice and the subsequent orders without providing the petitioner an opportunity for a personal hearing constitutes a violation of the principles of natural justice.Whether the reassignment of the case files to a different officer without informing the petitioner affects the validity of the orders issued.Whether the procedural errors in the issuance of the show cause notice and subsequent orders warrant setting aside the impugned orders.ISSUE-WISE DETAILED ANALYSIS1. Violation of Principles of Natural Justice due to Lack of HearingRelevant Legal Framework and Precedents: The principles of natural justice require that a party be given a fair opportunity to present their case, which includes the right to a hearing. This is a fundamental aspect of administrative law and is often encapsulated in the legal maxim 'audi alteram partem' (hear the other side).Court's Interpretation and Reasoning: The Court observed that the petitioner was not given an effective opportunity to be heard by the officer who issued the final order (Ext.P5). The show cause notice (Ext.P3) did not specify a clear date and time for the hearing, and the reassignment of the case to a different officer without informing the petitioner further compounded the issue.Key Evidence and Findings: The show cause notice lacked specificity regarding the hearing date and time, and the petitioner was not informed about the reassignment of the case to a different officer, which led to the issuance of the impugned order without a hearing.Application of Law to Facts: The Court applied the principles of natural justice to the facts, concluding that the lack of a hearing and failure to inform the petitioner about the reassignment of the case violated these principles.Treatment of Competing Arguments: While the respondent argued that the petitioner had been given notice for a hearing and failed to appear, the Court found that the notice was deficient in specifying the hearing details, and the reassignment without notice to the petitioner was a procedural lapse.Conclusions: The Court concluded that the impugned orders were vitiated due to a violation of the principles of natural justice and thus set them aside.2. Impact of Reassignment of Case FilesRelevant Legal Framework and Precedents: Administrative reassignments must be communicated to the parties involved, especially when such changes affect the proceedings or outcomes.Court's Interpretation and Reasoning: The Court noted that the reassignment of the case to a different officer without informing the petitioner was a procedural irregularity that contributed to the violation of natural justice.Key Evidence and Findings: The reassignment was not communicated to the petitioner, and the subsequent order was issued without granting the petitioner a hearing.Application of Law to Facts: The Court found that the failure to inform the petitioner about the reassignment deprived him of the opportunity to address his case before the officer who issued the final order.Treatment of Competing Arguments: The respondent's argument that administrative arrangements justified the reassignment was not sufficient to overcome the procedural deficiency of not informing the petitioner.Conclusions: The Court determined that the reassignment without notice to the petitioner further justified setting aside the impugned orders.SIGNIFICANT HOLDINGSPreserve Verbatim Quotes of Crucial Legal Reasoning: 'Since the impugned order was passed by the second respondent without hearing the petitioner or even granting him an effective opportunity to appear before the second respondent, I am of the view that Ext.P5 order is vitiated due to violation of principles of natural justice.'Core Principles Established: The judgment reinforces the principle that administrative actions must comply with the principles of natural justice, including the right to a fair hearing. Additionally, procedural changes such as reassignment of case files must be communicated to affected parties.Final Determinations on Each Issue: The Court set aside Ext.P5 and Ext.P7 orders due to procedural lapses and violations of natural justice. The second respondent was directed to pass fresh orders under Section 73 of the CGST Act after granting the petitioner an opportunity for a hearing.