GST Notice of Personal Hearing devoid of any details is invalid: Chhattisgarh HC

Tata Steel Ltd. Vs State of Chhattisgarh (Chhattisgarh High Court)

Introduction: In a recent case, Tata Steel Ltd. challenged a notice issued by the Revenue Department, claiming that it lacked essential details. The Chhattisgarh High Court addressed this issue, emphasizing the importance of compliance with Section 75(4) of the Central Goods and Services Tax Act, 2017 (CGST Act).

The Hon’ble Chhattisgarh High Court in the case of Tata Steel Ltd. v. State of Chhattisgarh [WPT No. 167 of 2023 dated November 7, 2023] disposed the writ petition and directed the Revenue Department to grant opportunity of personal hearing to the Assessee in compliance with Section 75(4) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) as notice of personal hearing was devoid of details pertaining to date, time and venue. Let’s delve into the case, its facts, and the court’s significant directives.

Facts:

Revenue Department (“the Respondent”) issued a notice dated August 11, 2021 (“the Impugned Notice”) under Section 73 of the CGST Act to Tata Steel Ltd (“the Petitioner”) directing the Petitioner to appear before the Respondent Authorities for personal hearing but the column of date of personal hearing, time of hearing and venue were left blank.

Aggrieved by the Impugned Notice, the Petitioner filed a writ petition before the Hon’ble Chhattisgarh High Court

Issue:

Whether the notice of personal hearing issued by the Revenue Department devoid of any details is valid?

Held:

The Hon’ble Chhattisgarh High Court in the case of WPT No. 167 of 2023 held as under:

• Opined that, though the Petitioner was granted the opportunity for personal hearing but the details of date, time and venue of personal hearing were left blank in the Impugned Notice.
• Held that, the writ petition is disposed.
• Directed that, the Respondent Authorities should afford an opportunity of hearing to the Petitioner in compliance with the provisions of Section 75(4) of the CGST Act.

Relevant Provision:

Section 75(4) of the CGST Act:

“Section 75: General Provisions relating to determination of tax

(4) An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.”

Conclusion: The Chhattisgarh High Court’s decision in the Tata Steel case underscores the significance of issuing notices with complete details for personal hearings under the CGST Act. Omitting crucial information, such as the date, time, and venue, renders the notice defective and may lead to legal challenges.

This ruling serves as a reminder to tax authorities to adhere to procedural requirements, ensuring fairness and transparency in the adjudication process. Businesses and taxpayers can also take note of this judgment, emphasizing the need for precise and comprehensive communication from tax authorities, especially when personal hearings are involved.

FULL TEXT OF THE JUDGMENT/ORDER OF CHHATTISGARH HIGH COURT

Heard.

1) Learned Senior Counsel appearing for the petitioner would submit that a notice under Section 73 of the Chhattisgarh Goods and Services Tax Act, 2017 (for short ‘ the Act of 2017’) was issued by the Revenue and the petitioner was directed to appear before the Deputy Commissioner State Tax, Division-2, Raipur (C.G.) but in details column, date of personal hearing, time of personal hearing and venue were not mentioned. It is further argued by learned Senior counsel that according to the provisions of Section 75(4) of the Act of 2017, an opportunity ought to be granted by the authorities before determining the tax value. It is also argued that no such opportunity has been granted, therefore, the impugned notice issued by the authority is illegal and liable to be set aside.

2) On the other hand, learned counsel for the State would oppose the submissions made by learned Senior counsel appearing for the petitioner. Ms. Jain would submit that several opportunities were granted to the petitioner to appear before the authority but those opportunities were not availed by the petitioner and therefore, there is no need to afford any opportunity to the petitioner. She would further submit that the authority issued a notice and granted liberty to the petitioner to file the reply. She would also submit that no application was moved by the petitioner to the effect that he requires a personal hearing, therefore, the provisions of Section 75(4) of the Act of 2017 would not attract.

3) Heard learned counsel appearing for the respective parties and carefully perused the material placed on record.

4) From a perusal of the notice dated 11.08.2021, it is quite clear that though in the opening para of the notice the petitioner was granted the opportunity to appear before the authority for a personal hearing, no details in this regard were mentioned in the notice and the date of personal hearing, time of personal hearing and venue were left blank.

5) Section 75(4) of the Act of 2017 reads as under:-

“S. 75(4) – An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.”

6) Given the contention put forth on either side, the provisions of Section 75(4) of the Act of 2017 and the contents of the notice dated 11.08.2021, this petition is disposed of thereby directing the authorities to afford an opportunity of hearing to the petitioner strictly in accordance with the provisions of Section 75(4) of the Act of 2017. The Revenue may fix a date for the personal appearance of the petitioner and on that day, the petitioner shall appear before the authority. If the petitioner fails to appear before the authority on the date fixed by the Revenue, the Revenue may proceed further

7) With the aforesaid observation(s) and direction(s), the present petition is disposed of.

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