Date of order has to be date of personal hearing. Hon’ble High Court quashed GST order passed without personal hearing
In a recent judgment, the Allahabad High Court has quashed order passed under Section 74 of the UPGST Act for not affording personal hearing observing that it is trite law that the date of the order passed has to be the date of personal hearing.
ABCAUS Case Law Citation:
ABCAUS 4129 (2024) (07) HC
In the instant case, the assessee/Petitioner had Challenged the order passed by the GST Authorities under Section 74 of the U.P. G.S.T. Act, 2017 (the Act). The case of the assessee was that opportunity of personal hearing was denied to him in violation of Section 75(4) of the Act.
The Hon’ble High Court noted that in a similar case the Bench had observed that it is basic to procedural law under taxing statutes that opportunity of personal hearing must be provided to an assessee before any assessment/adjudication order is passed against him. It is strange and wholly unacceptable merely because the substantive law has changed, the revenue authorities are failing to observe that mandatory requirement of procedural law.
In the said case, the admitted fact was that neither the adjudicating authority issued any further notice to the petitioner to show cause or to participate in the oral hearing, nor he granted any opportunity of personal hearing to the petitioner.
In the said case, the Bench had held that before any adverse order passed in an adjudication proceeding, personal hearing must be offered to the noticee. If the noticee chooses to waive that right, occasion may arise with the adjudicating authority, (in those facts), to proceed to deal with the case on merits, ex-parte. Also, another situation may exist where even after grant of such opportunity of personal hearing, the noticee fails to avail the same. Leaving such situations apart, we cannot allow a practice to arise or exist where opportunity of personal hearing may be denied to a person facing adjudication proceedings.
In the said case, the Co-ordinate Bench was apprised that the Commissioner, Commercial Tax, Uttar Pradesh, has issued Office Memo No. 1406 dated 12.11.2024. The same has been addressed to all Additional Commissioner to be communicated to all field formations for necessary compliance. It reads as below:
“1. The column in which date of personal hearing has to be mentioned, only N.A. is mentioned without mentioning any date.
2. The column in which time of personal hearing has to be mentioned, only N.A. is mentioned without mentioning time of hearing.
3. In some cases, the date of personal hearing is prior to which reply to the Show Cause Notice has to be submitted this is non-est and this practice has to be discontinued. The date of reply to the Show Cause Notice has to be definitely prior to the date of personal hearing.
4. In some cases, the date of personal hearing is on the same date to which reply to the Show Cause Notice has to be submitted-this is non-est and this practice has to be discontinued. The date of reply to the Show Cause Notice has to be definitely prior to the date of personal hearing.
5. In all cases observed, the date of passing order either u/s 73(9)/74(9) etc. of the Act is not commensurate to the date of personal hearing. It is trite law that the date of the order passed has to be the date of personal hearing. For eg.,the date of furnishing reply to SCN is 15.11.2023 and date of personal hearing is 17.11.2023, then the date of order has to be 17.11.2023″
In view of the above the Hon’ble High Court opined that before any adverse order is passed in an adjudication proceeding, personal hearing must be offered to the noticee. If the noticee chooses to waive that right, occasion may arise with the adjudicating authority, (in those facts), to proceed to deal with the case on merits, ex-parte. Also, another situation may exist where even after grant of such opportunity of personal hearing, the noticee fails to avail the same. Leaving such situations apart, we cannot allow a practice to arise or exist where opportunity of personal hearing may be denied to a person facing adjudication proceedings.
The Hon’ble High Court observed that in the present case as well the notice for filing of reply was issued fixing the date after 30 days. No separate / other date was fixed for hearing. Yet, without passing any order on the date fixed, the impugned order has been passed later fixing any date and without issuing any further notice for another date of hearing.
The Hon’ble High Court held that the impugned order cannot be sustained in the eyes of law being passed in gross violation of fundamental principles of natural justice. The self imposed bar of alternative remedy cannot be applied in such facts. If applied, it would be of no real use. In fact, it would be counter productive to the interest of justice.
The Hon’ble High Court allowed the Writ Petition and the impugned order was set-aside and the matter was remitted to the Assistant Commissioner to pass a fresh order, in accordance with law, after affording due opportunity of hearing to the petitioner.
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