Ex parte penalty orders set aside for lack of hearing; penalty under Section 125 not imposed after Section 47 late fees

The HC set aside the ex parte assessment and penalty orders passed without serving physical notices or providing a hearing, finding a violation of natural justice. Since only late fees under s. 47 were imposed earlier, penalty under s. 125 could not be additionally levied. The matter was remanded to the respondent for fresh consideration after providing an opportunity of hearing. Petition allowed by way of remand.

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ISSUES:

Whether the impugned order imposing late fee and penalty without physical service of notices and without hearing the petitioner is valid.Whether penalty under Section 125 can be imposed when late fee under Section 47 has already been levied for the same default.Whether the assessment order passed ex parte based solely on notices uploaded on the GST portal, without physical service, complies with principles of natural justice.Whether the matter requires remand for fresh consideration with opportunity of personal hearing.

RULINGS / HOLDINGS:

The impugned order imposing late fee and penalty was set aside because "no physical copy of the notices were served" and the petitioner was not afforded an opportunity of personal hearing, rendering the order passed ex parte invalid.Penalty under Section 125 was held to be "bad in law" when late fee under Section 47 has already been imposed for the same period, relying on the precedent that prohibits double penalization for the same default.The Court emphasized that notices uploaded only on the GST portal do not satisfy the requirement of service necessary to invoke adverse consequences without hearing.The matter was remanded to the Assessing Officer for fresh consideration after the petitioner files a reply, with directions to issue a clear 14 days' notice affording personal hearing before passing any further orders.

RATIONALE:

The Court applied principles of natural justice requiring that a party must be given notice and an opportunity to be heard before adverse orders are passed, particularly when penalties are involved.The legal framework includes Section 47 (late fee) and Section 125 (penalty) of the GST law, with the Court relying on prior authoritative judgment that prohibits imposition of penalty under Section 125 where late fee under Section 47 has already been imposed for the same default.The Court recognized that mere uploading of notices on the electronic portal does not constitute valid service if no physical copy is served, thus failing to inform the petitioner adequately.The remand to the Assessing Officer reflects a procedural safeguard to ensure compliance with statutory requirements and judicial precedents, and to provide the petitioner a fair opportunity to respond.

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