GST Demand Order Quashed for Denying Opportunity of personal Hearing
Summary in Key Points:
- Issue: Whether a GST demand order is valid when the assessee is denied an opportunity for a personal hearing, despite it being a mandatory requirement under the law.
- Facts: The assessee challenged a demand order passed without granting them a personal hearing. The show cause notice had a “N.A.” (Not Applicable) remark in the personal hearing column, and the adjudicating authority proceeded to pass the order without offering a hearing.
- Decision: The High Court quashed the demand order, holding that denying the assessee an opportunity of hearing violated the principles of natural justice and rendered the order unsustainable.
Decision:
The High Court ruled in favor of the assessee, quashing the impugned demand order. The court emphasized the following:
- Mandatory Hearing: The court reiterated that affording an opportunity of hearing is a mandatory requirement under the GST law, especially when an adverse decision is contemplated against the assessee.
- Violation of Natural Justice: By denying the assessee a personal hearing, the adjudicating authority violated the principles of natural justice, which mandates that no one should be condemned unheard.
- Unsustainable Order: The court held that the demand order passed without granting a hearing cannot be sustained in the eyes of law.
- Remand for Fresh Order: The matter was remanded back to the concerned authority with directions to pass a fresh order after providing the assessee a reasonable opportunity of hearing.
Important Note: This case reinforces the crucial importance of adhering to the principles of natural justice in GST proceedings. Providing a fair opportunity of hearing to the assessee is a non-negotiable requirement, and any order passed without granting such a hearing is liable to be quashed. This decision serves as a strong reminder to tax authorities to ensure procedural fairness and transparency in their actions, upholding the fundamental rights of taxpayers.
“7. In the table below the aforementioned lines, date, time and venue of personal hearing has not been mentioned. Section 75(4) of the Act, 2017 provides that opportunity of personal hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty or where any adverse decision is contemplated against such person.
8. Section 75(4) of the Act, 2017 reads as under:-
“An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.”
9. From perusal of Section 75(4) of the Act, 2017 it is evident that opportunity of hearing has to be granted by authorities under the Act, 2017 where either a request is received from the person chargeable with tax or penalty for opportunity of hearing or where any adverse decision is contemplated against such person. Thus, where an adverse decision is contemplated against the person, such a person even need not to request for opportunity of personal hearing and it is mandatory for the authority concerned to afford opportunity of personal hearing before passing an order adverse to such person.”