In the present case, the Hon’ble Karnataka High Court addressed the critical issue of granting a personal hearing under Sections 74 and 122(2)(b) of the CGST and KGST Acts. The petitioner, a registered partnership firm, filed a writ petition challenging an order issued after an inspection, claiming that the authorities failed to provide a personal hearing, thus breaching the principles of natural justice.
The Hon’ble High Court emphasized that, as per Section 75(4) of the CGST Act, the respondents are obliged to provide an opportunity for a personal hearing before passing any adverse order, irrespective of whether the taxpayer explicitly requests such an opportunity. The Hon’ble Court determined that the failure to offer a personal hearing violated natural justice principles, leading to the quashing of the orders dated 29.06.2019 and 04.08.2020. Additionally, the Hon’ble Court instructed the second respondent to grant the petitioner a personal hearing and to issue a new order within four weeks, considering all relevant arguments.
W&B Comments: This ruling underscores the judiciary’s emphasis on the principles of natural justice in tax proceedings. It’s unfortunate that such lapses happen repeatedly, despite the law being crystal clear. By reinforcing the obligation for tax authorities to provide a personal hearing, regardless of a request, the High Courts have multiple times ensured that taxpayers’ rights are upheld.