Imposition of Penalty Without Hearing Violates Principles of Natural Justice: Allahabad HC [Read Order]
The Allahabad High Court quashed a penalty order under Section 125 GST Act, observing that it was passed without giving the petitioner an opportunity of hearing.
Penalty - Allahabad - HC - Taxscan
Penalty - Allahabad - HC - Taxscan
In a recent ruling, the Allahabad High Court at Lucknow held that the levy of penalty without granting an opportunity of hearing is against the principles of natural justice.
Sriram Traders, through its proprietor Ajay Kumar Gupta, filed a writ petition challenging an order dated 20 January 2023 whereby a penalty of Rs. 50,000 was imposed under Section 125 of the Goods and Services Tax (GST) Act.
The petitioner was represented by Savitra Vardhan Singh. The petitioner’s counsel argued that the penalty had been imposed without providing any opportunity for a hearing, which is a clear violation of natural justice.
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The petitioner’s counsel further argued that under Section 125 of the Goods and Services Tax (GST) Act, the maximum penalty imposable is only Rs. 25,000, but the order mechanically imposed Rs. 50,000, making it contrary to the statutory provision.
The learned Standing Counsel C.S.C. represented the State.
The single-judge bench comprising Justice Pankaj Bhatia observed that the order dated 20 January 2023 did not reflect that any opportunity of hearing had been granted to the petitioner. The Court explained that passing such an order without hearing cannot be sustained in law.
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The court quashed the impugned order and remanded the matter to the concerned authority to pass a fresh order after giving the petitioner an opportunity of hearing in accordance with law. The writ petition was allowed.
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