HC Directs Dept. to Grant Hearing Opportunity to Assessee | Telephonic Conversation Insufficient

Case Details: Jupiter Exports v. Commissioner of Goods and Service Tax - [2023] 152 taxmann.com 584 (Delhi)

Judiciary and Counsel Details

• • Vibhu Bakhru & Amit Mahajan, JJ.
  • Chinmaya Seth & A.K. Sethi, Advs. for the Petitioner.
  • Sameer Vashisht for the Respondent.

Facts of the Case

In the present petition, the assessee alleged that the department raised a huge demand of tax along with penalty without affording assessee any opportunity of hearing. However, the department submitted that the applicability of principles of natural justice is not a rule of thumb or a straightjacket formula.

The department further opposed the petition by contended that the assessee had violated provisions of CGST Act and had nothing more to argue than what was contended in reply to Show Cause Notice which was considered by Adjudicating Authority. The telephonic conversation with assessee could be termed as equivalent to personal hearing.

High Court Held

The Honorable High Court noted that Section 75 of CGST Act, 2017 itself provides that a hearing is required to be given to person against whom an adverse decision is contemplated and it cannot be contended on behalf of authorities that same is not mandatory. Moreover, telephonic conversations for a brief period cannot be a substitute for a personal hearing or for that matter, be construed as a hearing at all.

Therefore, the Court held that the impugned demand notice was to be set aside and the matter was to be remanded to pass a fresh order after affording petitioner a due opportunity of being heard.

List of Cases Reviewed

• • BA Continuum India (P.) Ltd. v. Union of India W.P (L) No. 3264/2020 on 8-3-2021 (para 24), followed.
  • National Highways Authority of India v. Madhukar Kumar 2021 SCC OnLine SC 791
  • A.S. Motors (P.) Ltd. v. Union of India [2013] 10 SCC 114
  • Maharashtra State Board of Secondary & Higher Secondary Education v. K.S. Gandhi [1991] 2 SCC 716 (para 25) distinguished.