Heavy costs and disciplinary proceedings on GST Officers for not providing opportunity of personal hearing to taxpayers by Allahabad HC

 

𝐈𝐬𝐬𝐮𝐞 in the proceeding:

The central issue in the case of 𝘔𝘢𝘩𝘢𝘷𝘦𝘦𝘳 𝘛𝘳𝘢𝘥𝘪𝘯𝘨 𝘊𝘰𝘮𝘱𝘢𝘯𝘺 𝘝𝘴 𝘋𝘦𝘱𝘶𝘵𝘺 𝘊𝘰𝘮𝘮𝘪𝘴𝘴𝘪𝘰𝘯𝘦𝘳 𝘚𝘵𝘢𝘵𝘦 𝘛𝘢𝘹 𝘈𝘯𝘥 𝘈𝘯𝘰𝘵𝘩𝘦𝘳 (𝘈𝘭𝘭𝘢𝘩𝘢𝘣𝘢𝘥 𝘏𝘪𝘨𝘩 𝘊𝘰𝘶𝘳𝘵) 𝘞𝘳𝘪𝘵 𝘛𝘢𝘹 𝘕𝘰. – 303 𝘰𝘧 2024 𝘥𝘵. 4 𝘔𝘢𝘳𝘤𝘩 2024 & 𝘕𝘴 𝘈𝘨𝘳𝘰 𝘈𝘯𝘥 𝘌𝘯𝘨𝘪𝘯𝘦𝘦𝘳𝘪𝘯𝘨 𝘗𝘳𝘰𝘥𝘶𝘤𝘵𝘴 𝘝𝘴 𝘚𝘵𝘢𝘵𝘦 𝘰𝘧 𝘜.𝘗. 𝘢𝘯𝘥 𝘈𝘯𝘰𝘵𝘩𝘦𝘳 (𝘈𝘭𝘭𝘢𝘩𝘢𝘣𝘢𝘥 𝘏𝘪𝘨𝘩 𝘊𝘰𝘶𝘳𝘵) [𝘞𝘳𝘪𝘵 𝘛𝘢𝘹 𝘕𝘰. 672 𝘰𝘧 2024 𝘥𝘵. 16 𝘔𝘢𝘺 2024] was whether the denial of a

𝒑𝒆𝒓𝒔𝒐𝒏𝒂𝒍 𝒉𝒆𝒂𝒓𝒊𝒏𝒈 by the Deputy Commissioner under the Uttar Pradesh Goods and Services Tax Act, 2017 𝒗𝒊𝒐𝒍𝒂𝒕𝒆𝒅 𝒑𝒓𝒐𝒄𝒆𝒅𝒖𝒓𝒂𝒍 𝒍𝒂𝒘 𝒂𝒏𝒅 𝒑𝒓𝒊𝒏𝒄𝒊𝒑𝒍𝒆𝒔 𝒐𝒇 𝒏𝒂𝒕𝒖𝒓𝒂𝒍 𝒋𝒖𝒔𝒕𝒊𝒄𝒆.

𝐅𝐚𝐜𝐭𝐬 of the case:

🔹 The petitioner, challenged an order passed by the Deputy Commissioner State Tax.
🔹 The petitioner contended that they were not granted a personal hearing despite submitting replies to show- cause notices.
🔹 The Deputy Commissioner’s decision was based on the petitioner’s failure to pay tax on certain transactions.

 Ruling by the Hon’ble High 𝐂𝐨𝐮𝐫𝐭:

🔸 The Allahabad High Court emphasized the importance of personal hearings in adjudication proceedings.
🔸 It referred to 𝑺𝒆𝒄𝒕𝒊𝒐𝒏 75 (4) of the Act, which mandates granting a hearing upon request or in anticipation of an adverse decision.
🔸 The court found that the petitioner’s right to a personal hearing was violated.
🔸 It set aside the impugned order and remitted the matter to the Deputy Commissioner for a fresh decision after affording due opportunity for hearing.
🔸 The court clarified that the availability of the remedy of appeal under 𝑺𝒆𝒄𝒕𝒊𝒐𝒏 107 of the Act does not bar challenging procedural violations.
🔸 The court imposed 𝒉𝒆𝒂𝒗𝒚 𝒄𝒐𝒔𝒕𝒔 𝒇𝒐𝒓 𝒕𝒉𝒆 𝒄𝒐𝒏𝒅𝒖𝒄𝒕 𝒐𝒇𝒇𝒆𝒓𝒆𝒅 𝒃𝒚 𝒕𝒉𝒆 𝒐𝒇𝒇𝒊𝒄𝒆𝒓 and directed the Commissioner to undertake remedial measures including 𝒅𝒊𝒔𝒄𝒊𝒑𝒍𝒊𝒏𝒂𝒓𝒚 𝒑𝒓𝒐𝒄𝒆𝒆𝒅𝒊𝒏𝒈𝒔 𝒂𝒈𝒂𝒊𝒏𝒔𝒕 𝒆𝒓𝒓𝒊𝒏𝒈 𝒐𝒇𝒇𝒊𝒄𝒊𝒂𝒍𝒔, where fundamental principles of natural justice may be violated by the adjudicating authorities, without justifiable reason.

Conclusion: The ke𝐲 𝐓𝐚𝐤𝐞𝐚𝐰𝐚𝐲𝐬 from the above judgment could be summarized as under:
✅ 𝑵𝒂𝒕𝒖𝒓𝒂𝒍 𝑱𝒖𝒔𝒕𝒊𝒄𝒆: Denying a personal hearing violates principles of natural justice.
✅ 𝑷𝒓𝒐𝒄𝒆𝒅𝒖𝒓𝒂𝒍 𝑭𝒂𝒊𝒓𝒏𝒆𝒔𝒔: Personal hearings are fundamental to fairness in adjudication.
✅ 𝑹𝒆𝒎𝒆𝒅𝒊𝒂𝒍 𝑴𝒆𝒂𝒔𝒖𝒓𝒆𝒔: The court directed the Commissioner, Commercial Tax, to take disciplinary action against erring officials to prevent future violations.