Denial of Hearing Violates Natural Justice in GST Assessment
Issue: Whether an assessment order passed under Section 73 of the State GST Act, without providing the assessee an opportunity for a hearing, is valid, and whether the subsequent dismissal of an appeal on limitation grounds cures the initial procedural defect.
Facts:
- The assessee challenged an assessment order under Section 73 of the State GST Act.
- The assessee argued that no hearing was granted before the assessment order was passed.
- The subsequent appeal filed by the assessee was dismissed due to being time-barred (limitation).
- Revenue records indicated “N.A.” against the hearing date, confirming the absence of a scheduled or conducted hearing.
- The assessee claimed a violation of natural justice.
Decision:
- The court held that the absence of a hearing before passing the assessment order under Section 73 constituted a clear violation of Section 75(4) of the GST Act and the principles of natural justice.
- The court quashed the impugned assessment order and the order dismissing the appeal.
- The matter was remanded to the Assessing Authority for fresh consideration.
- The Assessing Authority was directed to provide the assessee with a proper opportunity for a hearing.
- The writ petition was disposed of in favour of the assessee.
HIGH COURT OF ALLAHABAD
Chaudhary Associates
v.
State of U.P.
Pankaj Bhatia, J.
WRIT TAX No. – 250 of 2024
OCTOBER 23, 2024
Ravindra Gupta, for the Petitioner.
ORDER
1. Heard learned counsel for the parties and perused the record.
2. The present petition has been filed by the petitioner challenging the order dated 22.12.2023 whereby an order under Section 73 of the State Goods & Service Tax Act against the petitioner as well as the order dated 30.08.2024 whereby the appeal preferred by the petitioner was dismissed as being beyond limitation.
3. Confining his argument, the counsel for the petitioner argues that no date of hearing was fixed nor any hearing granted to the petitioner prior to passing of an order under Section 73 of the State Goods & Service Tax Act.
4. Learned Standing counsel based upon the documents states that a communication sent to the petitioner as against the date of hearing, N.A. was transcribed.
5. Thus, prima facie, from the said communication as well as the from the impugned order, it is evident that no hearing was accorded to the petitioner prior to passing of an order under Section 73 of the State Goods & Service Tax Act, which is a clear violation of Section 75(4) of the GST Act and also in violation of the principle of nature justice. Thus on the said limited ground, both the impugned orders are quashed and the matter is remanded to the Assessing Authority to pass a fresh order after giving opportunity of hearing to the petitioner in accordance with law.
6. The petition is disposed of finally in terms of the above.