Fair Hearing is Mandatory: Violation of Natural Justice Leads to Quashing of GST Order by Allahabad HC

The Allahabad High Court quashed a GST order against the taxpayer, considering the breach of the provisions of natural justice, as no proper hearing opportunity was given.

Gulshan Ali has filed a writ petition in the Allahabad High Court, challenging an adjudication order passed on August 29, 2024, by the GST authorities under Section 73(9) of the U.P. G.S.T. Act, 2017. The case pertains to the tax period 2019-20.

During the hearing, the petitioner claimed that he was never given a proper opportunity for a hearing, which is a clear violation of the principles of natural justice because the date for submitting their reply and the date for the personal hearing were fixed on the same day. The petitioner cited a judgement in a case titled Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Another.

When the court analysed the facts of the case, it observed that these facts were not disputed. It highlighted that following natural justice is essential, and no exception can be made. A proper notice and adequate opportunity to be heard are mandatory before taking any final decision. Without this, the order becomes legally invalid.

Considering the aforementioned findings, the high court disposed of the writ petition by quashing the impugned order dated August 29, 2024. Additionally, directed the petitioner to consider the impugned order as a final notice. The petitioner has been granted a time period of three weeks to submit a detailed reply to the notice, including all legal and factual arguments.

The adjudicating authority must then provide at least 15 days’ notice before fixing a new date for the personal hearing, ensuring the petitioner has enough time to prepare. After hearing the matter, a fresh, reasoned order must be passed. Moreover, the tax authorities have removed any bank account or property attachments made based on the earlier order, permitting the petitioner to resume normal operations.