M/S Csk Realtors Limited vs. Assistant Commissioner (St)

Held

The Court held that the first respondent ought to have provided a personal hearing to the petitioner, as the petitioner had specifically requested it in its objections filed on February 18, 2020, in response to the show cause notice issued on January 31, 2020. The failure to grant a personal hearing constitutes a violation of the principles of natural justice. The Court relied on its previous judgments in M/s Manjunatha Traders and S. Lalaiah & Co., which highlight the importance of personal hearings in the assessment process. Consequently, the impugned assessment order passed by the first respondent on March 13, 2020, was set aside. The matter was remitted back to the first respondent for fresh consideration, with a direction to provide a personal hearing to the petitioner and then pass a reasoned order. No order as to costs was made.

Facts

CSK Realtors Limited (the petitioner) is engaged in construction and sale of flats and villas and is registered under the Goods and Services Tax Act, 2017. The Assistant Commissioner (ST), Basheerbagh - I Circle (the first respondent) issued a notice in Form GST ASMT-10 on December 17, 2019, proposing to levy tax of Rs. 3,27,36,879/- for the tax periods 2017-18 to 2018-19 (July 2017 to March 2019) due to discrepancies in returns. The petitioner filed objections on December 24, 2019. Subsequently, the first respondent issued a show cause notice under Section 73 of the Act on January 31, 2020, proposing to levy CGST + SGST totaling Rs. 3,27,36,878/- for the periods July 2017 to March 2018 and April 2018 to March 2019. The petitioner filed further objections on February 18, 2020, and requested a personal hearing. However, the first respondent passed an assessment order on March 13, 2020, without granting a personal hearing.

Key Issues

1. Whether the assessment order passed by the first respondent is illegal, arbitrary, unsustainable in law, and vitiated against the Principles of Natural Justice for being passed without granting a personal hearing, as contended by the petitioner, particularly in light of the petitioner's specific request for such a hearing? The petitioner argued that a specific request for a personal hearing was made, and the denial of this opportunity vitiates the order passed. Reliance was placed on the judgments of this Court in M/s Manjunatha Traders, New Firm, Proddatur and another v. Commercial Tax Officer-II, Proddatur & Others and S. Lalaiah & Co. v. Deputy Commissioner (CT), Sarronagar Division Hyderabad & another, which emphasize that a personal hearing is crucial for the assessing officer to be enlightened and to enlighten the assessee. The revenue or State did not dispute these legal principles.