GST: Granting of personal hearing mandatory where an adverse decision is taken by AO

Gayathri Agencies Vs State Tax Officer (Madras High Court)

Madras High Court held that as per provisions of section 75(4) of the GST Act, 2017 granting of personal hearing is mandatory where an adverse decision is taken by the AO against the assessee. Non-granting of the same is against the principles of natural justice. Accordingly, order liable to be quashed.

Facts- This writ petition has been filed, challenging the assessment order dated 31.10.2022 passed in respect of the assessment year 2017-18 under the GST Act 2017.

The petitioner has challenged the impugned assessment order on the ground of violation of principles of natural justice as the petitioner was not granted personal hearing in the impugned assessment proceedings. Section 75(4) of the GST Act 2017 mandates personal hearing to be given to the assessee if any adverse decision is taken against the assessee in the assessment proceedings.

Conclusion- Section 75(4) of the GST Act 2017 makes it clear that in cases, where an adverse decision is taken by the Assessing Officer against the assessee, personal hearing is mandatory. Admittedly, in the assessment proceedings, pertaining to the assessment year 2017-18, no personal hearing was afforded to the petitioner. This being the case, on the ground of violation of principles of natural justice as the impugned assessment order has been passed contrary to Section 75(4) of the GST Act 2017, which mandates personal hearing, the impugned assessment order dated 31.10.2022, pertaining to the assessment year 2017-18 has to be quashed and the matter has to be remanded back to the respondent for fresh consideration, on merits and in accordance with law.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

This writ petition has been filed, challenging the assessment order dated 31.10.2022 passed in respect of the assessment year 2017-18 under the GST Act 2017.

2. The petitioner has challenged the impugned assessment order on the ground of violation of principles of natural justice as the petitioner was not granted personal hearing in the impugned assessment proceedings. Section 75(4) of the GST Act 2017 mandates personal hearing to be given to the assessee if any adverse decision is taken against the assessee in the assessment proceedings.

3. Admittedly, in the impugned assessment order, an adverse decision has been taken against the petitioner, which is the subject matter of challenge in this writ petition.

4. On the last hearing date, this Court directed the learned Government Advocate appearing for the respondent to get instructions as to whether personal hearing was granted to the petitioner in respect of the impugned proceedings, pertaining to the assessment year 2017-18. On instructions, learned Government Advocate appearing for the respondent submits that no personal hearing was afforded to the petitioner in respect of the assessment year 2017-18.

5. Section 75(4) of the GST Act 2017 makes it clear that in cases, where an adverse decision is taken by the Assessing Officer against the assessee, personal hearing is mandatory. Admittedly, in the assessment proceedings, pertaining to the assessment year 2017-18, no personal hearing was afforded to the petitioner. This being the case, on the ground of violation of principles of natural justice as the impugned assessment order has been passed contrary to Section 75(4) of the GST Act 2017, which mandates personal hearing, the impugned assessment order dated 31.10.2022, pertaining to the assessment year 2017-18 has to be quashed and the matter has to be remanded back to the respondent for fresh consideration, on merits and in accordance with law.

6. For the foregoing reasons, the impugned assessment order dated 31.10.2022 passed in respect of the assessment year 2017-18 is hereby quashed and the matter is remanded back to the respondent for fresh consideration, on merits and in accordance with law. The respondent shall pass final orders, after adhering to the principles of natural justice, including granting the petitioner the right of personal hearing.

7. With the above direction, this writ petition stands disposed of.

Consequently, connected W.M.P. stands closed. No costs.