Non-Filing of Written Reply Cannot Lead to Denial of Oral Hearing: High Court

The Allahabad High Court has highlighted the importance of natural justice by setting aside an ex parte order that was passed without giving an opportunity for a personal hearing.

The petitioner company, Balaji Trading, challenged a GST order issued by the GST authorities. In the relevant notice issued to the petitioner, the column for date of “personal hearing” mentioned “NA” or ‘Not Applicable’. In the notice, the petitioner was also asked to submit its reply.

Meanwhile, Section 75(4) of the Act clearly says that before passing any adverse order, the person must be given an opportunity for a personal hearing.

The court explained that the petitioner has two rights as per the rules of natural justice. First is the right to file a written reply, and second is the right to appear for an oral hearing. The court ruled that even if the petitioner fails to file the written reply, they do not lose their right to appear for an oral hearing. “The two tests have to be satisfied independently,” the court said.

Since no personal hearing was given, the order was passed in violation of the rules of natural justice. Therefore, the court quashed the order and remitted the matter to the tax authorities for fresh consideration. The petitioner was directed to file its reply to the notice within two weeks. After this, the petitioner company may appear before the assessing authority on the date fixed, and the authority must then pass a proper, reasoned order.