CGST Act | Before Any Adverse Order Is Passed In Adjudication Proceeding, Personal Hearing Must Be Offered To Noticee: Allahabad HC
The Allahabad High Court observed that before any adverse order is passed in adjudication proceeding, a personal hearing must be offered to noticee under Section 75(4) of Central Goods And Services Tax Act, 2017.
The Court was hearing a Writ Petition challenging the order passed by the Deputy Commissioner, Commercial Tax Department, under Section 74(9) of the Central Goods and Services Tax Act, 2017.
The bench of Justice Saumitra Dayal Singh and Justice Donadi Ramesh observed, “before any adverse order passed in an adjudication proceeding, personal hearing must be offered to the noticee.”
In the present case, the Additional Chief Standing Counsel has raised a preliminary objection to the Writ Petition as to the availability of the remedy of appeal under Section 107 of the Act.
The Court said that the objection has been met by the petitioner on the strength of (violation of) Section 75(4) of the Act.
The Court observed, “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.”
The Court said that it finds it strange and wholly unacceptable merely because the substantive law has changed, the revenue authorities have changed their approach and are failing to observe that mandatory requirement of procedural law. They have thus denied the opportunity of hearing to the assessee.
The Court further noted that if the noticee chooses to waive that right, the occasion may arise with the adjudicating authority, to proceed to deal with the case on merits, ex-parte. According to the Court, another situation may exist where even after the grant of such opportunity of personal hearing, the noticee fails to avail the same.
However, as per the Court, leaving such situations apart, it cannot allow a practice to arise or exist where the opportunity of a personal hearing may be denied to a person facing adjudication proceedings.
Accordingly, the Court said that the impugned order is passed in gross violation of fundamental principles of natural justice therefore, it cannot be sustained in the eyes of law.
Finally, the Court directed the Commissioner, of Commercial Tax, Uttar Pradesh to take remedial measures including providing for disciplinary action against erring officials who violate principles of natural justice without justifiable reasons.
Cause Title: Ns Agro And Engineering Products v. State of U.P. (Neutral Citation: 2024:AHC:88320-DB)
Appearance:
Adv. Abhishek Rai and Adv. Ramesh Kumar