The Allahabad High Court has warned the Commissioner, Commercial Tax, Uttar Pradesh of disciplinary action and heavy costs on the Goods and Services Tax ( GST ) officials who denied the opportunity for hearing from the taxpayer. The court noted the violation in Principles of Natural Justice.
The bench of Justices Saumitra Dayal Singh and Donadi Ramesh ruled that , “..we direct the Commissioner, Commercial Tax, Uttar Pradesh to undertake remedial measures including providing for disciplinary proceedings against erring officials, where fundamental principles of natural justice may be violated by the adjudicating authorities, without justifiable reason.”
The challenge has been raised to the order dated 19.08.2021 passed by the Deputy Commissioner, Commercial Tax Department, under Section 74(9) of the Central Goods and Services Tax Act, 2017
The Deputy Commissioner’s order faced immediate objection from the petitioner’s counsel, who argued that it violated Section 75(4) of the Act, which mandates a personal hearing opportunity before any adverse decision is made. Despite the availability of an appeal under Section 107 of the Act, the petitioner emphasised the fundamental procedural lapse.
The court noted Section 75(4) of the GST Act explicitly states that an opportunity for a hearing must be granted if requested in writing by the person charged with tax or penalty, or if an adverse decision is anticipated. However, the adjudicating authority neither issued a notice for the petitioner to participate in an oral hearing nor provided any opportunity for a personal hearing.
In response to similar occurrences in other cases, the Commissioner of Commercial Tax, Uttar Pradesh, issued an Office Memo No. 1406 on 12.11.2024, addressing the need for compliance with procedural norms. The memo highlighted several issues:
The High Court emphasised that personal hearings are a fundamental right in adjudication proceedings. It stated that adverse orders must be preceded by a hearing unless waived by the noticee, and failure to provide such an opportunity constitutes a violation of natural justice principles.
The court, in addition to warning of disciplinary proceedings, considered imposing heavy costs due to the conduct of the GST official. Furthermore, the counsel for the respondent assured the court that such occurrences would not be repeated in the future.
As a result, the impugned order was deemed unsustainable and set aside. The matter was remitted to the Deputy Commissioner of the Commercial Tax Department, Sikandrabad, Bulandshahar, with instructions to pass a fresh order after duly affording the petitioner an opportunity for a hearing.
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