Komal Jayeshbhai Hemavat vs. State Tax Officer [TU-IDT-05-HC-2026]
Background of the Case
The appellant, a registered taxpayer under the GST law, was subjected to search proceedings wherein its premises were raided and books of accounts were seized by the department. Subsequently, a show cause notice in Form GST DRC-01 dated 21.09.2023 was issued proposing action under Section 74 of the CGST/GGST Act. The petitioner duly filed a reply in Form DRC-06 on 21.11.2023 addressing the allegations raised in the notice. However, without granting any opportunity of personal hearing, the adjudicating authority proceeded to pass an adverse order dated 30.12.2023 under Section 74.
Aggrieved by such action, the petitioner approached the High Court contending violation of principles of natural justice and statutory mandate under Section 75(4) of the Act.
Arguments by the Appellant (Assessee)
The petitioner primarily contended that the impugned order was passed in complete violation of Section 75(4) of the GST Act, which mandates grant of opportunity of personal hearing before passing any adverse order. It was argued that despite filing a detailed reply to the show cause notice, no hearing opportunity was afforded, thereby rendering the order legally unsustainable. The petitioner emphasized that the requirement of personal hearing is not merely procedural but a substantive safeguard ensuring fair adjudication. It was further submitted that denial of such opportunity amounts to breach of principles of natural justice, particularly the doctrine of audi alteram partem, and hence the order deserved to be quashed.
Respondent’s Response (Revenue)
The Revenue defended its action by submitting that the petitioner, while filing reply in Form DRC-06, had opted “No” in the column relating to personal hearing, and therefore, no such opportunity was granted. It was argued that the adjudicating authority acted in accordance with the option exercised by the petitioner and there was no procedural lapse. However, the Revenue fairly acknowledged before the Court that Section 75(4) of the GST Act envisages grant of personal hearing opportunities, and the same were not provided in the present case. Despite this, the department attempted to justify that the petitioner’s own selection of “No hearing” disentitled it from claiming such opportunity.
Court Findings and Decision
The Hon’ble Gujarat High Court held that the statutory mandate under Section 75(4) of the GST Act cannot be overridden by any option selected by the assessee in Form DRC-06. The Court observed that it is incumbent upon the adjudicating authority to grant adequate opportunity of personal hearing before passing any adverse order, irrespective of such selection. Relying on settled principles of natural justice and earlier judicial precedents, the Court reiterated that fair hearing is a fundamental requirement and denial thereof vitiates the entire proceedings.
Accordingly, the impugned order was quashed and set aside, and the matter was remanded back to the adjudicating authority for fresh adjudication after granting proper opportunity of hearing within a stipulated time period.
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