Trying to figure out the concept of “Opportunity to be Heard” in GST Cancellation, you’ve stumbled on just the right article. Keep reading to learn more!
In the realm of justice administration, upholding the principles of natural justice to ensure decisions is absolutely necessary. Rooted in the fundamental concept of spoken order, natural justice finds expression in Article 14 of the Indian Constitution, often referred to as “The concept of equality.”
This article explores the significance of the opportunity to be heard in the context of GST cancellation, emphasizing the basic principles of natural justice and their application in the Indian legal framework.
The Foundations of Natural Justice
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Nemo Judex In Causa Sua
The Latin phrase “Nemo judex in causa sua” underscores the principle that no one should be a judge in their own matter. This rule guards against any assessment by individuals with vested interests, even in the absence of actual bias. Its strict application ensures fairness and impartiality in legal proceedings.
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Audi Alteram Partem
The maxim “Audi Alteram Partem” emphasizes the right to a fair hearing before making any order or judgment. This principle, often referred to as the fair hearing rule, is rooted in the idea that no one should be condemned without being given an opportunity to present their side of the story. This principle forms the bedrock of natural justice.
Natural Justice in Tax Law
In the context of tax law, the principles of natural justice play a pivotal role. The Assessing Officer is obligated to inform the Assessee of any proposed additions and provide an opportunity to present evidence in support of their case. This ensures that the decision-making process is fair and unbiased.
Constitutional Safeguards
The Indian Constitution, through Articles 14 and 21, enshrines the concepts of natural justice. Any violation of these principles results in a breach of the equality clause, leading to arbitrariness. The principles of natural justice are seamlessly woven into Article 21, emphasizing both substantive and procedural due process.
Precedents and Legal Clarity
Historical cases like Mahadayal Premchandran v. Commercial Tax Officer and Suraj Mall Mohta & Co. v. A. V. Visvanath Sastry establish that proceedings before tax authorities are judicial processes. This recognition ensures that the principles of natural justice are upheld, allowing the assessee the right to review all records before presenting evidence in opposition.
GST Cancellation and Natural Justice
The principles of natural justice extend to the realm of GST cancellation, seeking to promote equity in society and protect individuals from arbitrary actions. The cancellation of GST registration without affording the applicant an opportunity to be heard is a violation of these principles.
| A pivotal aspect of the “principle of Natural Justice” is providing an opportunity to be heard in GST cancellation proceedings. This feature allows individuals to bring forth witnesses and present a defense. The Supreme Court, in the matter of Ram Chandran v. Union of India, emphasized the equal application of natural justice at all stages of the legal process. |
Opportunity of Being Heard in GST Cancellation: The Case of Ashok Kumar Vishwakarma vs. Union of India
The case of Ashok Kumar Vishwakarma vs. Union of India, heard in the Bombay High Court, revolves around the cancellation of GST registration and the crucial principles of natural justice.
Relevant Facts
The petitioner had been consistent in filing GST returns until January 2022 when a show cause notice was issued on April 13, 2022, citing the alleged issuance of invoices without the supply of goods or services, leading to wrongful availing of input tax credit.
Despite the petitioner’s email response requesting time until May 16, 2022, for a personal hearing, the concerned officer passed an order on May 4, 2022, concluding that the registration was liable to be cancelled. Notably, the officer neither acknowledged the email nor granted a hearing, infringing upon the principles of natural justice.
Challenging the order, the petitioner approached the Appellate Authority, arguing that the order was contrary to Section 29(2) of the CGST Act, 2017, and breached the principle of natural justice by not providing a hearing or reasons supporting the cancellation. The Appellate Authority, in its decision on January 23, 2023, upheld the cancellation, citing short payment of taxes, excess availment of input tax credit, and discrepancies in availing credit from a non-existent supplier.
The petitioner then filed a Writ Application, asserting that the Appellate Authority’s order was unlawful and violated the principle of natural justice. The legal provisions central to the case included Section 29(2) of the CGST Act, which empowers the proper officer to cancel registration for various reasons, with a mandatory provision for granting an opportunity of being heard.
Judgement
The Bombay High Court, in its judgment on 07/08/2023, found the order of GST cancellation to be erroneous. It noted that the petitioner was not properly heard, and the provisions of Section 29(2) were not followed. The Appellate Authority had overlooked the grounds of appeal and introduced fresh material, such as short payment of taxes, without due process.
Consequently, the court quashed and set aside the orders of the concerned officer and the Appellate Authority, emphasizing that if GST registration is to be cancelled, legal procedures must be meticulously followed. The court directed the restoration of the petitioner’s registration within three weeks from the date of the order, highlighting the paramount importance of upholding principles of natural justice even in cases of alleged non-compliance.
Other Judicial Observations
Judicial pronouncements, such as those in Smt. Ritu Devi v. CIT and E. Vittal v. Appropriate Authority, underscore the importance of a real and meaningful opportunity to be heard. Here the court held that restrictions should not hinder the effectiveness of this opportunity, and the right to be heard should not be a mere formality.
Conclusion
In conclusion, the opportunity to be heard in GST cancellation is a crucial element of natural justice. As explored through legal principles, constitutional safeguards, and judicial observations, it is evident that this opportunity must be sincere, reasonable, and effective.
Any deviation from these principles jeopardizes the integrity of the legal process and undermines the quest for justice. Understanding and upholding the essence of natural justice in GST cancellation ensures a fair and equitable legal landscape.
For further information and assistance, individuals can reach out to legal service providers, such as Vakilsearch, whose experts can address queries and provide guidance in navigating these intricacies.
