Natural justice in GST adjudication: assessment and appellate orders quashed for failure to consider the reply and grant a proper hearing.

An assessment order under the GST Act was held unsustainable for breach of natural justice because the authority did not properly consider the taxpayer's reply, proceeded on the assumption that supporting evidence was absent, and failed to afford an effective hearing. The appellate order was also set aside because it could not stand once the original adjudication was found defective. The High Court quashed both orders and remanded the matter for fresh decision after giving the taxpayer an opportunity to be heard.

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Issues: Whether the order passed under Section 73 of the GST Act and the appellate order dismissing the appeal as time-barred were sustainable where the reply and defence were not properly considered and no effective hearing was afforded.

Analysis: The order under Section 73 was found to be short of the requirements of natural justice because it did not adequately deal with the petitioner's reply and proceeded on the footing that supporting evidence was absent, though the authority could have required production of such evidence. The appellate order was also set aside as it could not survive once the original adjudication was found defective.

Conclusion: The challenge succeeded. The adjudication order and the appellate order were quashed, and the matter was remanded for fresh decision after affording an opportunity of hearing.

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