M/S. Surya Mitra Traders vs. The Assistant Commissioner

Held

The Court held that the impugned ex-parte assessment order was passed in violation of the principles of natural justice and the mandatory provisions of Section 75(4) of the CGST Act and Rule 142 of the CGST Rules, as no opportunity for personal hearing was granted to the petitioner. The Court noted that this was similar to the situation in W.P.No.23154 of 2021 and W.P.No.9162 of 2021. Therefore, the Court set aside the impugned assessment order. The matter was remanded to the 1st respondent for passing fresh orders after providing the petitioner with an opportunity of personal hearing. The Court clarified that if the petitioner or their authorized representative fails to appear on the date fixed for hearing, the authority would be at liberty to pass final orders. The ratio decidendi is that an assessment order passed without affording a mandatory personal hearing, as required by Section 75(4) of the CGST Act, is unsustainable and liable to be set aside.

Facts

The petitioner filed a writ petition challenging an ex-parte assessment, penalty, and interest order passed by the 1st respondent (Revenue) for the tax periods July 2017 to September 2018. The petitioner contended that the order was passed in violation of principles of natural justice and mandatory provisions of Section 75(4) of the CGST Act and Rule 142 of the CGST Rules, as no opportunity for personal hearing was provided. The petitioner also pointed out that a similar issue concerning the petitioner was decided by the High Court in W.P.No.23154 of 2021, where the matter was remanded for fresh consideration after affording a hearing. The Revenue argued that the order was passed due to the petitioner's non-response to the show-cause notice.

Key Issues

1. Whether the ex-parte assessment order passed by the 1st respondent is violative of the principles of natural justice and the mandatory provisions of Sub-Section (4) of Section 75 of the Central Goods and Services Tax Act, 2017, and Rule 142 of the CGST Rules, 2017, by failing to provide an opportunity for personal hearing? Petitioner's Contention: The petitioner argued that Section 75(4) of the CGST Act mandates a personal hearing, especially when an adverse decision is contemplated. They asserted that no such notice for personal hearing was issued. They relied on the High Court's order in W.P.No.23154 of 2021, which remanded a similar matter for a hearing. Revenue's Contention: The Revenue contended that the impugned order was passed as the petitioner did not respond to the show-cause notice, leaving the authorities with no alternative.