GST Update

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? ????????????????????????????????: In favour of the Petitioner

Ved Enterprises challenged a GST adjudication order dated 24 April 2024 passed under Section 74 of the U.P. GST Act.

The Department had issued a show-cause notice asking the taxpayer to submit a written reply. However, the reminder notice mentioned “NA” against the date, time and venue of personal hearing. Therefore, no proper personal hearing was provided before passing the adverse order.

The Department argued that the petitioner had failed to file a written reply. The Allahabad High Court clarified that filing a written reply and receiving a personal hearing are two separate legal safeguards.

Failure to submit a written reply may result in closure of the opportunity to make written submissions. However, it cannot take away the taxpayer’s independent right to explain the matter during a personal hearing.

Section 75(4) of the GST law requires the authority to provide an opportunity of hearing whenever an adverse decision is proposed against a taxpayer.

Accordingly, the High Court set aside the adjudication order and remanded the matter to the GST authority for fresh consideration after granting a proper opportunity of personal hearing.

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Non-filing of a written reply does not mean that the taxpayer has waived the right to a personal hearing. A GST demand order passed without providing the mandatory hearing may be challenged for violation of Section 75(4) and the principles of natural justice.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS