The appellant was served with a notice under Section 73(1) of CGST Act on 29.09.2023. The last date for reply was fixed at 30.10.2023 for which the appellant sought extension of time while the date of personal hearing was given as 12.10.2023, eventually after further extension reply was filed on 15.11.2023 but personal hearing was not given and order challenged before the Learned Single Bench were passed on 29.12.2023.
The Learned Division Bench of Hon’ble Chhattisgarh High Court held that the mandate of the law is that upon demand notice time must be provided for reply from the assessee after which he may be given an opportunity to be heard in a personal hearing before passing appropriate order. It is not the scheme of the act to give personal hearing first and then seek reply to the notice, the reply must be sought first and subsequently an opportunity to be heard must be given. As such the procedure adopted in this case was held to be wrong and violative of the principles of natural justice of the appellant.
The Hon’ble High Court held that where a statute contains a mandate of hearing the principles of natural justice automatically apply upon such a procedure and that administrative authorities must be mindful of them while exercising their statutory power. As such the order passed by the Joint Commissioner of State Tax was set aside as it amounted to defeat the rules of natural justice and the object of the legislation and the appellant provided the opportunity to appear for personal hearing before the authority.
W&B Comments: The judgement by Hon’ble Chhattisgarh High Court underscores fundamental principles of natural justice in administrative proceedings under them GST laws[1]. It emphasizes on procedural fairness by providing an opportunity for the appellant to respond to a notice under Section 73(1) before scheduling a personal hearing.
[1] Dharampal Satyapal Ltd. v. CCE, (2015) 8 SCC 519; Umanath Pandey v. State of UP [2009] 12 SCC 40-43; Ridge v. Baldwin, (1963) 2 All ER 66.