SGST High Court Cases

GST – Interpretation of Section 75(4) of CGST Act, 2017 - Meaning of expression ‘opportunity of hearing’ – Obligation to provide opportunity of hearing - Demand for excess Input Tax Credit along with imposition of interest and penalty under Section 74 of the CGST Act, 2017 – Petitioner challenge the impugned adjudication order on the ground that the order has been passed without considering the submissions of petitioner and also without providing an opportunity of hearing – Violation of principles of natural justice – whether the expression ‘opportunity of hearing’ is fulfilled if reply to show cause notice is received – HELD - plain reading of sub-section 4 of Section 75 of the Act makes it crystal clear that “opportunity of hearing” must be granted in two situations where a request in specific is received in writing from the person chargeable; and where any adverse decision is contemplated against such person - The language employed in sub-section 4 of Section 75 leaves no room for any doubt that the word ‘or’ is used by the law makers for a specific purpose. Although, in the first portion of Section 75(4) of the Act, talks about a specific request, the portion after the word ‘or’ makes it clear that opportunity of hearing is required to be given, even in those cases where no such request is made but adverse decision is contemplated against such person - even law makers while prescribing the statutory form has visualized different stages for the purpose of ‘personal hearing’. The one stage is when the reply is submitted and the other stage is date, venue and time of the personal hearing. Hence, unable to approve the line of argument of ld. Government Advocate that ‘opportunity of hearing’ does not include the opportunity of ‘personal hearing’ - In the instant case whether or not the petitioners have specifically asked for personal hearing, fact remains that the adverse decision was contemplated against the petitioners. In that event, it was obligatory and mandatory on the part of respondents to provide the petitioners opportunity of personal hearing. Admittedly, no opportunity of personal hearing has been provided in both the matters - the decision making process adopted by the respondents is vitiated and runs contrary to the principles of natural justice and statutory requirement of sub-section 4 of Section 75 of CGST Act - the impugned proceedings after the stage of reply of show cause notices, in both the cases are set-aside - The respondents shall provide opportunity of hearing to the petitioners by some other officer than the officer who has issued the show cause notice – writ petition is allowed

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