Can order be passed against the assessee without giving him the opportunity of being heard if demanded by him?

PJ/Case Law/2020-2021/3627

Biswajit Mohanty and B.P. Routray, JJ. SERAJUDDIN AND CO. Versus UNION OF INDIA W.P. (C) No. 288 of 2020, decided on 9-1-2020
Issue: - Can order be passed against the assessee without giving him the opportunity of being heard if demanded by him?
Brief Facts: -In this case a show cause notice was issued to petitioner on 03-12-2019 for submission of reply till 04-12-2019. The petitioner prayed for four weeks to file the reply and requested the authority in writing to be heard in person. However, without considering the plea of petitioner, the adjudicating authority passed the impugned order on 09-12-2019 and 10-12-2019.
Applicant’s Contention: -The applicant submitted that as per sub-section (5) of Section 75 of Orissa GST Act, if sufficient cause is shown for time extension, then the proper officer is liable to grant time and adjourn the hearing for the reasons to be recorded in writing. According to him, the petitioner No. 1 in his letter dated 3-12-2019 under Annexure-4 has shown sufficient cause. Further even as per proviso to sub-section (5) of Section 75, such adjournment can also be granted for three times during the proceedings. In the instant case without passing any order on the prayer/petition for adjournment, the impugned orders under Annexure-5 series have been passed. Relying sub-section (4) of Section 75, he submits that whenever an assessee makes a request for granting an opportunity of hearing, the same should be given to him. In the present case, despite such request under Annexure-4, the impugned orders have been passed without giving such opportunity. Accordingly, he submits that there has been a violation of statutory requirements and this vitiates the entire decision-making process. For these reasons, the impugned orders should be set aside.
Department’s Contention: -The department vehemently defends the impugned orders and submits that no illegality has been committed while passing the same. However, upon query, he does not dispute receipt of letter dated 3-12-2019 under Annexure-4 and Form GST DRC-06 under Annexure-4 by the authorities.
High Court’s Observation: -A perusal of sub-section (4) of the Section 75 of the Act makes it clear that whenever an assessee, chargeable with tax and penalty makes a request in writing for opportunity of hearing, such an opportunity should be granted to him. Here, admittedly though a request was made on 4-12-2019 under Annexure-4 for personal hearing, however, without granting the same the impugned orders have been passed. Further, despite receipt of the request dated 3-12-2019 under Annexure-4 for grant of additional time for filing show cause, without passing any order on the same, the impugned orders have been passed.
High Court’s Order:- The honorable court held that impugned order under Annexure-5 Series have been passed in violation of the statutory requirements as indicated above. Therefore, they quashed the impugned orders and remand the matter back to State Tax Officer, CT & GST Circle, Barbil - opposite party no. 4 to proceed with the matter strictly in accordance with law. The petitioners are also directed to cooperate in the proceeding. According writ petition is disposed of.
Comment: -In view of the above, it is mandated on the part of the GST department to follow principles of natural justice by issuing SCN and fair opportunity of being heard before taking any action. Hence, the direct issue of order by the GST department is a gross violation of principles of natural justice and runs contrary to the settled jurisprudence.
Prepared By Tarun Rankawat

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PJ/Case Law/2020-2021/3627

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