Tag: Personal Hearing not granted

Personal Hearing not granted – Assessee was not acquainted with GST Portal – Order Set Aside

Citation:

Tvl. Samikannu Mariappan Vs. State Tax Officer,

W.P. No. 15509 of 2024, [2024] 164 taxmann.com 275 (Madras)

High Court of Madras

Facts of the Case:

  1. Petitioner, an octogenarian, whose Turnover is below GST Threshold, has engaged a Local Auditor for ensuring GST Compliances.
  2. Counsel for Petitioner submits that if provided an opportunity, the petitioner would be able to establish that the demand is liable to be dropped.
  3. It was held that since the present order was passed on Best Judgment basis without providing Opportunity of being heard, the same is set aside.
  4. Department is directed to provide opportunity of being heard, including personal hearing and thereafter issue a fresh order.

Section 75(4) of CGST Act states that:

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.

Similar Decision:

Personal Hearing was not granted even after requesting for the same – Order Set Aside

Personal Hearing was not granted even after requesting for the same – Order Set Aside

Citation:

Tvl. Town & City Developers Vs. State Tax Officer (Intelligence)

W.P. Nos. 11579, 11591 & 11595 of 2024 – High Court of Madras

[2024] 163 taxmann.com 547 (Madras)

Issue Involved:

Order-in-Original exceeded jurisdiction by applying GST at 5% instead of 1% merely on the allegation of non-compliance with Notification No.3/2019 – Central Tax (Rate) dated 29.03.2019. Personal Hearing was not granted in spite of requesting for the same in the Reply to the Show Cause Notice.

Other Grounds of Appeal:

  1. Essential Ingredients for invoking Section 74 are not contained in the Show Cause Notice.
  2. Impugned Order does not make reference to the petitioner’s replies (This ground was not sustained)

Held:

Order Set aside subject to the petitioner making 5% of tax disputed within two weeks.

Provisions relating to Personal Hearing: Section 75 – General Provisions relating to Determination of Tax:

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.

75(5) – The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing:

Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.

Where the right of Personal Hearing is not waived, Ex Parte order cannot be passed

Citation:

Kuehne Nagel (P.) Ltd. Vs. State of Maharashtra – Writ Petition No. 15210 of 2023

[2023] 157 taxmann.com 366 (Bombay)

Hon’ble High Court of Bombay

Relevant Facts:

  1. The assessee has in their reply to SCN specifically requested for Personal Hearing, but while submitting the reply in the GST Portal, they have checked the box “No” with regard to selection of Option for Personal Hearing.
  2. Hence, the department has not granted Personal Hearing.

Provisions governing grant of Opportunity of Personal Hearing:

Section 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.

Section 75(5):

The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing:

Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.

Findings:

  1. This is an Inadvertent error on the part of the petitioner in ticking the Box “No”, because in the written reply to the Show Cause Notice, they have expressly requested for Personal Hearing.
  2. The department was under an obligation to grant Personal Hearing.
  3. The adjudicating officer (AO) was required to take into consideration the specific request. A Mechanical approach was adopted by AO in only noticing the box where the petitioner has inadvertently put a tick mark on “No”.
  4. This was not a case where the petitioner has expressly waived its right of Personal Hearing.
  5. Section 75(4) is applicable and the impugned order is in breach of Principles of Natural Justice and is contrary to Section 75(4).

Order:

  1. The Impugned Order is Quashed and Set Aside.
  2. The Petitioner shall be granted an Opportunity of Personal Hearing and after considering the contentions of the petitioner, appropriate Order shall be passed within 4 Weeks.

Adjudication Order passed without providing written notice of Personal Hearing and ignoring the reply of the assessee is set aside

Citation:

Cart2India Online Retail (P.) Ltd. Vs. Union of India

Writ Petition (L) No. 25179 of 2023

[2023] 157 taxmann.com 212 (Bombay)

Facts of the Case:

  1. Petitioner has submitted a reply in DRC-06 dated 17th June 2023 to the Show Cause Notice, where Option for Personal Hearing has been selected as “Yes”.
  2. They have received a phone call on 5th July 2023 requiring them to attend personal hearing on 7th July 2023. No written Notice was issued regarding the hearing. Though the petitioner has stated on call that he would appear, he could not appear on the said date.
  3. Without providing a final opportunity for personal hearing, order been issued in DRC-07 demanding Tax, along with Interest u/s. 50 and Penalty u/s. 73(9) of CGST Act and Section 20 of IGST Act by the State Tax Officer (STO).
  4. Petitioner stated that the order passed is against the principles of Natural Justice and therefore the same needs to be set aside and passed after providing an opportunity of Personal Hearing.
  5. Hon’ble High Court of Bombay has observed that:
    • Petitioner has sufficiently requested for grant of personal hearing.
    • Merely because they have not attended the hearing without valid reason, it should not be presumed that they are not interested in hearing.
    • No written notice was issued regarding the hearing and the Order also did not consider the submissions of the petitioner as given in their reply to the Show Cause Notice.
  6. It was held that:
    • The Impugned Order dated 26th July 2023 is quashed and Set Aside and remanded back to STO, to be decided after providing an opportunity of personal hearing.
    • Petitioner is directed to appear before STO on 8th December 2023 to undertake to appear for Personal Hearing on a fixed date.
    • If the petitioner does not appear for hearing after undertaking to do so, STO is free to proceed further and pass an appropriate Order.