Section 75(4) of CGST Act – 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.
According to this section opportunity of hearing shall be granted in following two situations –
1. When the person makes a specific request for personal hearing in writing or
2. When an adverse decision is contemplated against the person concern.
Both situations are independent from the each other.
The various High Courts of the land have analyzed provisions relating to “Opportunity of Personal Hearing” stated in section 75(4) of the CGST Act. The following Nine Judgements are discussed in this article. On perusal of the judgements, it has been noted that opportunity of personal hearing is mandate before passing the adverse order. The situations as decided in the judgements are as under:
> The person concern had not asked for the personal hearing;
> No personal hearing is required if it is not asked by the petitioner in his reply;
> Personal hearing is required before passing any adverse order;
> Online proceedings cannot do away the opportunity of personal hearing;
> Personal hearing is mandatory before passing any adverse order against the assessee;
> Tick Marked the option ‘NO’ against the option for personal hearing;
> No Date, Time and Venue of personal hearing provided in the Show Cause Notice and
> Opportunity of personal hearing cannot be done away with the reply filed belatedly and the same (reply) was rejected
> Opportunity of hearing to be granted to an assessee where such request is received in writing from the person
The person concern had not asked for the personal hearing – AYYANAR STEEL TRADING (2021-VIL-653-MAD) – “A plain, but careful reading of the sub-section (4) of Section 75 and the language in which it is couched, makes it clear that opportunity of hearing to the person chargeable with tax is statutorily imperative not only when such person makes a specific request in writing, but also when an adverse decision is contemplated against such person and these two situations are put together in sub-section (4) by connecting the two by ‘or’. In other words, these two are not conjunctive and they have not been put together by using the conjunction ‘and’. Therefore, it follows as a sequitur that in cases where an adverse decision is contemplated, it is statutorily imperative to give an opportunity of hearing under Section 75(4).
No personal hearing is required if it is not asked by the petitioner in his reply – RAM PRASAD GANGA PRASAD & ORS. (2021-VIL-890-CAL) – It is a settled law that opportunity of hearing may be afforded either by way of allowing the petitioners to make any written representation for their case or it may be by allowing personal hearing and in this case petitioners were allowed to make written representation/objection and when petitioners have not asked for personal hearing and petitioners have not been able to show any provision of relevant laws mandating the authority to give personal hearing, question of violation of principles of natural justice does not arise in this case. It is relevant to note that Section 75(4) of the GST Act simply says about hearing and not about personal hearing.
Personal hearing is required before passing any adverse order – BHARAT MINT AND ALLIED CHEMICALS (2022-VIL-189-ALH) – The Court held that “………… where an adverse decision is contemplated against the person, such a person even need not to request for opportunity of personal hearing and it is mandatory for the authority concerned to afford opportunity of personal hearing before passing an order adverse to such person.
Online proceedings cannot do away the opportunity of personal hearing – GRAZIANO TRASMISSIONI INDIA PRIVATE LIMITED (2022-VIL-512-GUJ) – The stand on the part of the Department is that the Online Portal mode was chosen by the petitioners, which had resulted in the entire matter having been proceeded Online. The opportunity of hearing was not granted since the same was not requested for. The Court held that even without any request having been made on the part of the party concerned, when any adverse decision is contemplated, personal hearing is a must.
Personal hearing is mandatory before passing any adverse order against the assessee – M/s ULTRATECH CEMENT LIMITED (2023-VIL-45-MP) – As per Section 75(4) of the Act, personal hearing is mandatory before passing any adverse order against the assessee. The court did not wait for reply of the respondents and set aside the order with observations that we see no reason why we should wait for the respondents to file the reply and prolong the agony of the petitioner and also waste precious judicial time.
Tick Marked the option ‘NO’ against the option for personal hearing – M/s MOHAN AGENCIES (2023-VIL-114-ALH) – The respondent contended that after declined the opportunity for personal hearing, the petitioner cannot turn around to claim any error in the impugned order passed consequently. The court held that once it has been laid down by way of a principle of law that a person/assessee is not required to request for “opportunity of personal hearing” and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order, the fact that the petitioner may have signified ‘No’ in the column meant to mark the assessee’s choice to avail personal hearing, would bear no legal consequence.
No Date, Time and Venue of personal hearing provided in the Show Cause Notice – CONCORD TIEUP PVT LTD (2023-VIL-269-MP) – “Details of personal hearing etc.”, no Date, Time and Venue of personal hearing has been shown and in front of columns 3, 4 & 5 of Date, Time and Venue, NA has been mentioned, which is sufficient to infer that no personal hearing was given to the petitioner before passing the impugned order.
Opportunity of personal hearing cannot be done away with the reply filed belatedly and the same (reply) was rejected – M/s PRINCIPLE MAHENDRA PRIVATE LIMITED (2023-VIL-339-KAR) – The mandate under Section 75(4) of the CGST Act, 2017 is clear that, when a written request is made from the person chargeable with tax or penalty seeking for personal hearing, the same is required to be considered. Clearly there is violation of the mandate under Section 75(4) of the Act and the submission of the learned counsel for the Revenue that the request for personal hearing was made out in the reply, which having been rejected, the request for personal hearing is also to be rejected is a hyper technical interpretation which has resulted in rejection of the opportunity under Section 75(4) of the Act, which cannot be accepted. Accordingly, case is made out for setting aside the impugned order in the light of the violation of the non-granting of opportunity of personal hearing under Section 75(4) of the Act.
Opportunity of hearing to be granted to an assessee where such request is received in writing from the person – M/s SRI KRISHNA TIMBERS & M/s MARUTHI TRADERS – (2023-VIL-368-MAD) – The petitioners have specifically requested for an opportunity of personal hearing, it was incumbent upon the officer to have fix the matter for hearing, heard the petitioners and thereafter determined the tax payable.
Conclusion – Though it is mandatory that opportunity of personal hearing must be granted before passing the adverse order according to the provisions of section 75(4) of the CGST Act even then it is advisable that the person concern should put the clause of personal hearing in his reply or petition.
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