Goods & Services Tax (GST) in IndiaOpportunity of Personal Hearing sine qua non for passing of Order

The Allahabad High Court, in NS Agro Engineering Products v State of UP and Anr., [Writ Tax No. 672 of 2024 decided on 06.05.2024], held that an order passed without adhering the principles of natural justice is unsustainable in law and Adjudicating Authority must provide an opportunity of personal hearing for adherence with Section 75(4) of the CGST Act.

FACTS

NS Agro and Engineering Products (hereinafter referred to as the “Petitioner”) has challenged the Order-in-Original dated 19.08.2021 (hereinafter referred to as the “Impugned Order”) passed by Ld. Deputy Commissioner of the Commercial Tax Department in Sikandrabad, Bulandshahar (hereinafter referred to as the “Respondent”).

The Petitioner has preferred the appeal on the basis that the Impugned Order is in contravention of Section 75(4) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST Act”).

ISSUES BEFORE THE SUPREME COURT

1. Whether the present Petition is maintainable before this Hon’ble High Court?

2. Whether the Impugned Order is violative of principles of natural justice?

3. Whether the Impugned Order is in contravention to Section 75(4) of the CGST Act?

CONTENTIONS OF THE PARTIES

The Petitioner contended that the Impugned Order passed by the Respondent was violative of Section 74(9) of the CGST Act. It was further contended that the Impugned Order was passed without granting an opportunity of a personal hearing, which is in violation of the principles of natural justice.

The Respondent contended that the present Petition was not maintainable as the Petitioner had an available remedy of appeal under Section 107 of the CGST Act.

DECISION AND FINDINGS

The Allahabad High Court observed that an opportunity of personal hearing is the fundamental principle to be followed by any Adjudicating Authority before passing any order. It was further held that the Ld. Commissioner, Commercial Tax, Uttar Pradesh vide Office Memo No.1406 dated 12.11.2024 had addressed to all Additional Commissioner for necessary compliance, which involved adherence to principles of natural justice and according to an opportunity of personal hearing.

It was observed that the Impugned Order is violative of Section 75(4) of the CGST Act and quashed and set aside the Impugned Order and directed the Respondent to pass a fresh order in accordance with the law after according to an opportunity of personal hearing.

AMLEGALS REMARKS

The Allahabad High Court has upheld that the Adjudicating Authority must adhere to the principles of natural justice while passing an order. Moreover, passing of an order without according an opportunity of a personal hearing is in contravention to Section 75(4) of the CGST Act.

– Team AMLEGALS