PERSONAL HEARING   MANDATORY  FOR   PASSED ADVERSE GST ORDERS

 MADRAS HIGH COURT

J-Lin Construction

versus

Assistant Commissioner

Appeal Number: Writ Petition No. 14739 & 14755 of 2024

Date of Judgment/order: 13/06/2024

BACKGROUND:

The case involved J-Lin Constructions, a company specializing in civil work contracts, challenging orders and rectification petitions issued by tax authorities. The main issue was the denial of a personal hearing during the issuance of the original orders and subsequent rectification orders. The petitioner argued that this denial violated Section 75(4) of GST laws, which requires a personal hearing before finalizing adverse orders.

In this matter, the Madras HC addresses the necessity of personal hearings under GST laws, emphasizing the significant nature even in matters where adverse orders are contemplated without explicit request from the taxpayer.

JUDGMENT IMPORTANT PARAS:

PARA 2. The petitioner is engaged in the business of executing civil work contracts. Pursuant to an inspection of the petitioner’s premises, show cause notice dated 07.07.2023 was issued to the petitioner. Such show cause notice was replied to on 07.08.2023 and 28.08.2023. Orders in original were issued on 19.09.2023. The petitioner filed rectification petitions in respect thereof and such rectification petitions were rejected by orders dated 24.04.2024.

PARA 3. Learned counsel for the petitioner submits that the petitioner contended in the reply to the show cause notice that the ingredients of Section 74 were not satisfied. He further submits that the said reply was not taken into consideration and that no findings were recorded on the petitioner’s contentions. In addition, he submits that no personal hearing was granted thereby violating sub-section (4) of Section 75 of applicable GST enactments.

PARA 4. Mr. T.N.C. Kaushik learned Additional Government Pleader, accepts notice for the respondent. He points out that a personal hearing was granted when the rectification petitions were disposed of. He also points out that the petitioner did not request for a personal hearing and that the petitioner checked the box for no personal hearing.

PARA 5. Under sub-section (4) of Section 75 of applicable GST enactments, a personal hearing is mandatory not only when requested for but when an order adverse to the tax payer is proposed to be issued. In all these cases, the tax proposals were confirmed without the petitioner being provided a personal hearing. On account of the infraction of a mandatory prescription, orders impugned herein cannot be sustained.

PARA 6. Therefore, impugned orders in original dated 19.09.2023 are set aside and these matters are remanded for reconsideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue fresh orders within three months from the date of receipt of a copy of this order.

PARA 7. These writ petitions are disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.