2026 (1) TMI 503 - HC - GST

GST tax notifications and assessment order challenged for lack of fair hearing; assessment set aside, notifications invalidated, case remanded.

The dominant issue was whether the impugned GST notifications and the consequential assessment order were legally sustainable, particularly in light of ... Validity of N/Ns. 09/2023 & 56/2023 issued by the GST Council and the consequential assessment order dated 30.07.2024 passed by the 1st respondent - Violation of principles of natural justice - HELD THAT:- It is clear that though the proceedings initiated by the respondent is valid, the impugned assessment order came to be passed in violation of principles of natural justice. In such view of the matter, this Court feels that it would be appropriate to provide an opportunity to the petitioner to establish his case before the respondent. The impugned Notification Nos.09/2023 dated 31.03.2023 and 56/2023 dated 28.12.2023 stand vitiated and illegal - The impugned order dated 30.07.2024 is hereby set aside and the matter is remanded back to the 1st respondent for fresh consideration. Petition disposed off by way of remand. Issues: (i) Whether Notification Nos. 09/2023 and 56/2023 are valid; (ii) Whether the assessment order dated 30.07.2024 (initiated under Section 168A) is valid and, if invalid, what relief is appropriate.Issue (i): Whether Notification Nos.09/2023 dated 31.03.2023 and 56/2023 dated 28.11.2023 are legally valid.Analysis: The legal framework involves the effect of the Supreme Court's order under Article 142 concerning exclusion of the period 15.03.2020 to 28.02.2022 for limitation reckoning and the statutory procedures governing issuance of notifications under the CGST law. The Notifications were examined against whether they curtailed limitation available in consequence of the Article 142 order, proceeded on an erroneous assumption as to limitation, extinguished vested rights of action by authorities, were issued without examination of relevant materials, and whether Notification No.56/2023 complied with the statutory recommendation requirements.Conclusion: The Notifications stand vitiated and illegal; conclusion is in favour of the assessee.Issue (ii): Whether the assessment order dated 30.07.2024, initiated by applying Section 168A, is valid and whether the petitioner (as legal heir) was denied natural justice.Analysis: The legal framework includes Section 168A of the CGST Act, Section 73 (limitation aspects) and the requirement of affording opportunity of hearing before passing assessment/adjudication. The initiation of proceedings by applying Section 168A was considered in light of the Apex Court's extension order relating to limitation; the initiation itself was held valid. However, the assessment order was passed without affording a personal hearing to the petitioner (legal heir), thereby violating principles of natural justice. The matter required re-examination by the assessing authority with opportunity to file objections and be heard.Conclusion: The assessment order dated 30.07.2024 is set aside and remanded for fresh consideration; conclusion is in favour of the assessee.Final Conclusion: The Notifications are declared illegal and the impugned assessment order is set aside and remitted to the assessing authority for fresh adjudication after granting the petitioner an opportunity to file objections and a personal hearing; the remedy granted vindicates procedural and natural justice defects while preserving the validity of initiation under Section 168A in the facts of the case.Ratio Decidendi: A notification that curtails limitation afforded by a Supreme Court order under Article 142, or is issued without complying with statutory mandate or proper material examination, is arbitrary and vitiated; where an assessment order is passed without affording a personal hearing, it must be set aside and remitted for fresh decision after hearing the affected party.