The Allahabad High Court has observed that a minimal opportunity for hearing should be given before passing Goods and Services Tax ( GST ) assessment orders that impose huge civil liabilities.
The court was hearing a writ petition challenging an assessment order dated April 16, 2024, issued by the Assistant Commissioner for the tax period April 2018 to March 2019, which raised a tax demand of approximately ₹1 crore against the petitioner.
The petitioner, Munni Jeneral Store contended that the notice issued on December 20, 2023, provided no opportunity for a personal hearing. The notice explicitly marked “NA” in the columns for the date, time, and venue of the personal hearing.
Citing Section 75(4) of the U.P. GST Act, 2017, and relying on precedents such as Bharat Mint & Allied Chemicals v. Commissioner Commercial Tax and M/S Hitech Sweet Water Technologies Pvt. Ltd. v. State of Gujarat, the petitioner argued that an opportunity for a personal hearing is mandatory before passing an adverse order.
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The revenue countered that the petitioner had declined the opportunity for a hearing by selecting “No” in the online reply to the show-cause notice.
However, the court rejected this argument, stating that the requirement to provide a hearing is mandatory under Section 75(4), irrespective of the petitioner’s response in the online form.
The bench of Justices Vipin Chandra Dixit and Shekhar B. Saraf underlined that observing the principles of natural justice, particularly in cases involving substantial civil liabilities, is essential.
The words of the bench are as follows: “Even otherwise in the context of an assessment order creating heavy civil liability, observing such minimal opportunity of hearing is a must. Principle of natural justice would commend to this Court to bind the authorities to always ensure to provide such opportunity of hearing.”
It was added that granting an opportunity for a personal hearing ensures that the assessee’s stand is fully understood, facilitates a reasoned decision, and enhances the scope for a fair appellate review.
Consequently, the court set aside the impugned order and directed the Assistant Commissioner to issue a fresh notice within two weeks.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The petitioner was instructed to appear before the authority on the next scheduled date to ensure the proceedings are concluded expeditiously.
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