A two judge bench of the Allahabad High Court has held that it s the mandatory duty of the GST department to grant an opportunity of hearing to a person once an adverse order is passed against him.
The petitioners, Bharat Mint And Allied Chemicals approached the Court against the assessment order creating demand of tax, interest and penalty, has been passed without affording opportunity of hearing contemplated in Section 75(4) of the Central Goods and Services Tax, 2017/ U.P. Goods and Services Tax, 2017.
The counsels for the petitioner, advocates Abhinav Mehrotra and Satya Vrata Mehrotracontended thatthe impugned order being patently in breach of principles of natural justice, is unsustainable and deserves to be quashed.
From perusal of Section 75(4) of the Act, it is evident that opportunity of hearing has to be granted by authorities under the Act 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, it prima facie, appears that where an adverse decision is contemplated against the person, such a person even need not to request for opportunity of hearing and it appears to be mandatory for the authority concerned to afford opportunity of hearing before passing an order adverse to such person.
Justices Surya Prakash Kesarwani and Jayant Banerji observed that “from perusal of the impugned order, it, prima facie, appears that the provisions of Section 75(4) of the Act, have not been complied with. Section 75(4) is reiteration of principles of natural justice.”
Allowing an interim relief to the petitioners, the Court observed that “Learned standing counsel prays for and is granted a week’s time to enable the respondents to file counter affidavit. In the counter affidavit, the respondents shall specifically disclose as to whether opportunity of hearing was afforded to the petiitoner as contemplated in Section 75(4) of the Act and in the event, it has not been afforded, then the reasons therefore.”
Bharat Mint And Allied Chemicals VS Commissioner Commercial Tax And 2 Others
CITATION: 2022 TAXSCAN (HC) 142
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