The principles of natural justice are fundamental to any adjudication process under GST. They require that no adverse order be passed without giving the affected party a fair opportunity to be heard. Violation of these principles renders the order unsustainable.
This article explains the principles of natural justice as applied in GST proceedings and the remedies available for violation.
The Right to Personal Hearing
Section 75(4) of the CGST Act mandates that a personal hearing must be granted if the taxpayer requests it or if the officer intends to pass an adverse order. The Bombay High Court has held that a mere written reply cannot substitute a personal hearing.
When Natural Justice Is Violated
Natural justice is violated when:
- No hearing is granted despite a request.
- The hearing is granted but the officer does not consider the submissions.
- The order is passed on the same day as the reply is filed.
- The order is passed without giving the taxpayer an opportunity to respond to new material.
Recent Court Rulings
The Gujarat High Court has set aside GST orders where the taxpayer's request for a personal hearing was ignored. The Uttarakhand High Court has set aside an order passed on the same day as the reply. The Bombay High Court has held that natural justice applies to rectification proceedings as well.
The Waiver of Hearing
A taxpayer can waive the right to a personal hearing. The High Court has held that when the taxpayer expressly waives the right to a personal hearing, they cannot later contend that the order is vitiated for want of hearing.
Remedies for Violation
If natural justice has been violated, the taxpayer can:
- File an appeal before the Appellate Authority.
- File a writ petition before the High Court.
- Seek remand of the matter for fresh consideration.
Practical Steps
- Always request a personal hearing in writing.
- Submit a detailed written reply before the hearing.
- Attend the hearing with a representative.
- Record the proceedings and note the officer's responses.
- If the order is passed without hearing, challenge it immediately.
Conclusion
The principles of natural justice are a cornerstone of GST adjudication. Taxpayers have a right to a fair hearing, and violation of this right renders the order unsustainable. Courts have consistently protected this right.
At Anuj Desai & Associates, we provide expert representation services for GST adjudication matters, including challenges based on violation of natural justice. Our team can help you protect your right to a fair hearing.
For a confidential consultation, contact us at office@anujdesaiassociates.com or call 9619456656. Visit our website at https://anujdesaiassociates.com or connect with our founder on LinkedIn at linkedin.com/in/ca-anuj-desai-122547230.