Case Note & Summary
The judgment involves a batch of writ petitions filed by individual taxpayers challenging show cause notices and orders passed under the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioners, including Mr. Prashanth Sreedhar Shenoi, V. Raghuraman, and Sri C.V. Sudhindra, sought quashing of the impugned notices and orders on the ground that they violated the principles of natural justice, specifically the mandatory requirement of personal hearing under Section 75(4) of the CGST Act. The petitioners argued that the show cause notices did not specify the amount of tax demanded and that no opportunity of personal hearing was granted before passing the orders. The respondents, including the Assistant Commissioner of Central Tax and the Joint Commissioner of Central Tax, contended that the notices were valid and that the petitioners had been given sufficient opportunity to respond. The court, after examining the provisions of the CGST Act, held that Section 75(4) mandates that an opportunity of hearing be given to the person concerned before any adverse order is passed. The court noted that the show cause notices in question did not specify the amount of tax demanded, which is a fundamental requirement under Section 73. The court further observed that the requirement of personal hearing is not a mere formality but a substantive right that cannot be dispensed with unless the person waives it. Since the petitioners were not given such an opportunity, the proceedings were vitiated. The court allowed the writ petitions, quashed the impugned show cause notices and orders, and directed the respondents to provide a fresh opportunity of hearing to the petitioners in accordance with law.
Headnote
A) Constitutional Law - Writ Jurisdiction - Articles 226 and 227 of the Constitution of India, 1950 - Quashing of Show Cause Notices - Petitioners challenged show cause notices and orders passed under CGST Act for non-compliance with Section 75(4) - Court held that personal hearing is mandatory and cannot be waived without proper opportunity - Notices quashed (Paras 1-10) B) Goods and Services Tax - Show Cause Notice - Section 75(4) of Central Goods and Services Tax Act, 2017 - Mandatory Personal Hearing - The court held that the requirement of personal hearing under Section 75(4) is mandatory and the authority must provide an opportunity of hearing before passing any adverse order - Failure to do so vitiates the proceedings (Paras 5-8) C) Goods and Services Tax - Show Cause Notice - Section 73 of Central Goods and Services Tax Act, 2017 - Specification of Tax Amount - The show cause notice must specify the amount of tax demanded - Notices that do not specify the amount are defective and liable to be quashed (Para 6)
Issue of Consideration
Whether the show cause notices and orders passed under the Central Goods and Services Tax Act, 2017 are valid when they fail to comply with the mandatory requirement of personal hearing under Section 75(4) and do not specify the amount of tax demanded.
Final Decision
The court allowed the writ petitions, quashed the impugned show cause notices and orders, and directed the respondents to provide a fresh opportunity of hearing to the petitioners in accordance with law.
Law Points
- Mandatory personal hearing under Section 75(4) of CGST Act cannot be dispensed with unless proper opportunity is given
- Show cause notice must specify the amount of tax demanded
- Natural justice requires opportunity of hearing before adverse order
