Order passed before the dates provided for filing of reply and personal hearing is violative of principles of natural justice

The Allahabad High Court has ruled that an adjudication order passed before the scheduled dates for filing a reply and for a personal hearing is a violation of natural justice. In the case of Sunil Enterprises, an order was issued before the communicated dates for reply and hearing, leading the court to set aside the order. The court emphasised that once dates are fixed and communicated, no order can be made until those dates have passed, ensuring a fair opportunity for the assessee.

The Hon'ble Allahabad High Court in Sunil Enterprises v. Commissioner Commercial Tax [Writ Tax no. 730 of 2023 dated May 29, 2023]set aside the order passed by the Adjudicating Authority and held that once the dates have been fixed and communicated to the assessee for the purpose of filing of written reply and for the purpose of oral hearing then no adjudication order could be passed before the dates have passed.

Facts

Sunil Enterprises ("the Petitioner") received a Show Cause Notice ("the SCN") dated April 3, 2021, and subsequently, Order dated May 31, 2021("the Impugned Order"), was passed by the Deputy Commissioner ("Adjudicating Authority") against the Petitioner despite the again undisputedly last notice issued to the petitioner, in those proceedings was for the date fixed June 08, 2021 for reply and, June 10, 2021 for personal hearing.
Aggrieved by the Impugned Order the Petitioner filed the present writ petition.

Issue

Whether an order passed by the Adjudicating Authority before the dates provided for filing the reply and personal hearing is violative of the principles of natural justice?

Held

The Hon'ble Allahabad High Court in Writ Tax no. 730 of 2023 held as under:

• Observed that, the Impugned Order had been passed much before the arrival of the dates of reply and personal hearing which was not permissible neither on the basis of principles of natural justice nor Section 75(4) of the Central Goods and Services Tax, Act, 2017 ("the CGST Act")
• Held that, once the date has been fixed and communicated to the Petitioner both for the purpose of filing written reply and for the purpose of oral hearing then no adjudication order could be passed before the dates have arrived.
• Set aside the Impugned Order and the matter is remitted to the Adjudicating Authority to pass fresh order strictly in accordance with law after providing adequate opportunity of hearing to the petitioner.

Relevant Provision

Section 75(4) of the CGST Act

"General provisions relating to determination of tax

75(1) ….
75(2) ….
75(3) ….
75(4) An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person."