M/S Satguru Cattle Feeds And Chemoplast vs. State Of Bihar

Held

The Court agreed with the submission of the petitioner. It held that Section 75(4) of the CGST/BGST Act, 2017 mandates that an opportunity of personal hearing must be granted to the assessee if a request is received in writing or if any adverse decision is contemplated against such person. The Court found that the assessing officer had not provided any opportunity of personal hearing to the petitioner after the filing of their response. Therefore, the impugned order was set aside. The Court directed the petitioner to appear before the proper officer within three weeks, who would then hear the petitioner's representative or fix a date for hearing. An appropriate order is to be passed thereafter, with the entire exercise to be completed within three months from the date of receipt of the order.

Facts

The petitioner, M/s Satguru Cattle Feeds and Chemoplast, a proprietorship concern, is challenging an order passed by the assessing officer determining taxes and raising a demand for the period 2017-18. The petitioner filed a reply to the show cause notice on October 5, 2023. The petitioner contends that despite filing a reply, they were not granted a personal hearing before the assessing officer passed an adverse order. The State respondents, in their counter affidavit, admitted that a reply was filed and that the notice of show cause (Annexure P-2A) mentioned a date for personal hearing.

Key Issues

1. Whether the assessing officer was statutorily obligated to grant a personal hearing to the petitioner after the filing of their reply to the show cause notice, even if the petitioner did not explicitly request one, when an adverse decision was contemplated, under Section 75(4) of the CGST/BGST Act, 2017? Petitioner's arguments: The petitioner argued that Section 75(4) of the CGST/BGST Act, 2017 mandates a personal hearing when an adverse decision is contemplated against the assessee, irrespective of whether a specific request for hearing was made. They contended that the assessing officer's failure to provide a personal hearing after considering their reply violated this statutory provision. Reliance was placed on previous judgments of the High Court in CWJC No. 14239 of 2024 (M/S. Agarwal Tube Company vs. UOI and Others) and CWJC No. 4180 of 2024 (M/s Barhonia Engicon Private Limited vs. State of Bihar and others). Revenue/State's arguments: The State respondents admitted that a reply was filed by the petitioner and that the notice of show cause mentioned a date for personal hearing. However, the judgment does not record any specific arguments from the State respondents regarding the interpretation of Section 75(4) or their compliance with it.