P.R.Papers Represented By Its Proprietor vs. The Deputy State Tax Officer-2

Facts

The petitioner, M/s. P.R. Papers, challenged assessment orders for the tax periods 2017-2018 and 2018-2019, passed by the Deputy State Tax Officer -2, Nagercoil. The respondent conducted an inspection on 23.09.2022 and 24.09.2022, finding discrepancies. Show cause notices were issued, with personal hearing dates fixed for 30.06.2023 and 07.08.2023. The petitioner claimed to have received the first notice belatedly and could not attend due to ill health (cancer). A final personal hearing was fixed for 07.09.2023, but the officer was on leave. The impugned orders were passed without providing a further opportunity. The petitioner's representation dated 21.11.2023 requesting a personal hearing was not considered.

Held

The Court held that the impugned assessment orders were passed in violation of the principles of natural justice, specifically Section 75(4) of the GST Act, 2017. The Court noted that the petitioner had made a specific request for a personal hearing through a representation dated 21.11.2023, which was not considered. The Court also took into account the admitted fact that the officer was on leave on the final personal hearing date of 07.09.2023, and the petitioner had previously been unable to attend due to ill health. Citing its own previous decisions in similar matters (WP Nos.4105, 4110 and 4108 of 2023), the Court reiterated that an opportunity of personal hearing must be granted when an adverse decision is contemplated, even if not explicitly requested, and certainly when a request is made. Therefore, the impugned orders were set aside, and the matter was remanded back to the respondent for fresh consideration. The petitioner was directed to appear for a personal hearing on 26.02.2024, and the respondent was directed to pass a decision within four weeks thereafter, after providing a personal hearing.

Key Issues

1. Whether the impugned assessment orders, passed without affording a personal hearing to the petitioner despite a specific request and the officer's absence on the scheduled date, violate the principles of natural justice under Section 75(4) of the GST Act, 2017? Petitioner's arguments: The petitioner contended that the impugned orders were passed ex-parte without providing a proper opportunity for personal hearing, especially after the officer's absence on 07.09.2023 and the subsequent representation for a hearing on 21.11.2023. Reliance was placed on the petitioner's ill health as a reason for previous non-attendance. The petitioner sought to quash the orders and obtain a direction for a fresh hearing. Respondent's arguments: The respondent argued that show cause notices were issued with sufficient opportunities for personal hearing on 30.06.2023 and 07.08.2023, which the petitioner failed to attend. The respondent acknowledged the officer's absence on 07.09.2023 but implied that subsequent orders were passed.