High Court Quashes GST Order Passed without giving opportunity of being heard

The Gauhati High Court ruled that the department passed the original order without giving a proper hearing, which is against natural justice. Therefore, the Court directed that the entire proceedings should be started fresh, a copy of the show cause notice should be given to the petitioners, and they should be given a chance to reply and a personal hearing.

This appeal was filed by M/s S3 Enterprise and its partner, Abdul Quddus Ali, against the authorities of the Union of India and the GST department and others. The appeal has been filed in the Gauhati High Court.

In this case, the conflict started when petitioner no. 2 received a recovery notice on  january 01 2024, declaring that an Order-in-Original had already been passed against them on July 19 2021. In this order, a service tax of Rs 496,375 and interest and penalty on us were confirmed. The petitioners said that they never received a show cause notice and were not given an opportunity to be heard. According to them, a direct order has been passed without listening to them, which is illegal as per the law.

The petitioner immediately made a representation before the authority on january 11, 2024 and asked for a copy of the show cause notice. The Department replied that they had sent all the notices through registered post; therefore, it would mean that the petitioner would have received it. But the petitioners strongly denied this and said that they had not received any communication, due to which they were not able to present their defence properly.

The court heard both sides. The court observed that if notice to the petitioner was not actually served, then passing the order without giving a hearing is a violation of the principle of natural justice. The court also considered that the petitioner should be given a fair chance to present his case, especially when it is a matter of a tax demand and penalty.

Therefore, the Court finally decided that the entire matter should be considered fresh. The department was directed to issue or serve the original show cause notice again, and the petitioner should be given a reasonable time to reply. He should also be given a chance for a personal hearing. In this way, the court ensured that the further proceedings would be conducted in a fair and transparent manner.