Preca Solutions INDIA PVT LTD vs. Assisant Commissioner (State Tax)

Held

The Court held that the impugned order dated 21.11.2022 was passed in violation of sub-section (4) of Section 75 of the Central Goods and Service Tax Act, 2017, and also in violation of the principles of natural justice. The Court observed that while the impugned order mentioned an opportunity of personal hearing was afforded, the reference cited for this was merely an authorization by the Joint Commissioner, not a notice issued to the petitioner. The Court concluded that the petitioner had indeed requested a personal hearing, and the absence of a proper notice and hearing led to an "irresistible conclusion" that the law and natural justice were violated. Consequently, the impugned order was set aside. The Court clarified that this decision did not prevent the authorities from passing a fresh order after providing the petitioner with a proper hearing. No costs were awarded.

Facts

The petitioner filed a Writ Petition challenging an order dated 21.11.2022 passed by the Assistant Commissioner (State Tax). This order was preceded by a show-cause notice dated 23.06.2022, to which the petitioner submitted a response on 03.08.2022. The petitioner's primary contention was that the impugned order was passed in contravention of Section 75(4) of the Central Goods and Service Tax Act, 2017, and in violation of the principles of natural justice. The revenue argued that issuing a show-cause notice and receiving a response negated any violation of natural justice or statutory provisions.

Key Issues

1. Whether the impugned order passed by the Assistant Commissioner (State Tax) on 21.11.2022 is liable to be set aside for being in contravention of sub-section (4) of Section 75 of the Central Goods and Service Tax Act, 2017, and in violation of the principles of natural justice? Petitioner's contention: The petitioner argued that the Assistant Commissioner failed to grant a personal hearing despite a request, thereby violating Section 75(4) of the Act, which mandates an opportunity of hearing when an adverse decision is contemplated or a request is received. This failure also constituted a breach of natural justice principles. Revenue's contention: The revenue contended that the issuance of a show-cause notice and the petitioner's submission of an explanation satisfied the requirements of natural justice and statutory compliance, and therefore, the order was not in contravention of law.