Case Note & Summary
The petitioners, Cowtown Software Design Pvt. Ltd. and its Associate General Manager Milind Karnik, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court challenging an assessment order dated 31 August 2023 passed under Section 73 of the Maharashtra Goods and Services Tax Act, 2017 (MGST Act). The petitioners contended that the assessment order was passed in violation of the principles of natural justice as they were not granted a personal hearing despite making a specific request in their reply to the show cause notice. The show cause notice was issued proposing a demand for tax, interest, and penalty. The petitioners filed a detailed reply and requested a personal hearing, but the Deputy Commissioner of State Tax passed the assessment order without affording any hearing. The court, after hearing the parties, observed that Section 75(4) of the MGST Act mandates that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax. Since the petitioners had requested a personal hearing, the failure to grant one vitiated the assessment order. The court allowed the petition, set aside the impugned assessment order, and remanded the matter back to the assessing officer for fresh adjudication after providing a reasonable opportunity of hearing to the petitioners. The court also directed that the petitioners be allowed to file additional submissions and that the officer pass a fresh order within three months. The rule was made absolute with no order as to costs.
Headnote
A) Constitutional Law - Natural Justice - Personal Hearing - Section 75(4) of the Maharashtra Goods and Services Tax Act, 2017 - The court considered whether the assessment order passed under Section 73 of the MGST Act was valid when the petitioner was not afforded a personal hearing despite requesting one. The court held that the failure to grant a personal hearing violated the principles of natural justice and the statutory mandate under Section 75(4), rendering the assessment order invalid. (Paras 1-6) B) Goods and Services Tax - Assessment - Show Cause Notice - Section 73 of the Maharashtra Goods and Services Tax Act, 2017 - The court examined whether the show cause notice was properly served and whether the petitioner had an adequate opportunity to respond. The court found that the petitioner had replied to the notice and requested a personal hearing, but the assessing officer passed the order without granting such hearing. The court set aside the order and remanded the matter for fresh consideration after providing a personal hearing. (Paras 1-6)
Issue of Consideration
Whether the assessment order passed under Section 73 of the MGST Act, 2017 is valid when the petitioner was not granted a personal hearing and the show cause notice was not properly served or responded to.
Final Decision
The court allowed the writ petition, set aside the impugned assessment order dated 31 August 2023, and remanded the matter to the assessing officer for fresh adjudication after granting a reasonable opportunity of hearing to the petitioners. The petitioners were permitted to file additional submissions within two weeks, and the officer was directed to pass a fresh order within three months. Rule made absolute with no order as to costs.
Law Points
- Natural justice
- Personal hearing
- Show cause notice
- Assessment order
- GST
- Section 75(4) MGST Act
- Section 73 MGST Act
- Violation of principles of natural justice
- Remand
