Bombay HC Quashes Premature GST Assessment Order for Violation of Natural Justice; Imposes Costs on Erring Officer
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Hind Maha Mineral LLP v. The State of Maharashtra, through its Secretary, Department of Goods and Services Tax, Mumbai and others
Source & Citation
CaseHind Maha Mineral LLP v. The State of Maharashtra, through its Secretary, Department of Goods and Services Tax, Mumbai and others
Publication statusTo be published soon
5-Second Takeaway The Bombay High Court struck down an adverse GST assessment and penalty order for flagrant violations of statutory timelines and the right to a personal hearing, reaffirming that writ courts will bypass statutory appeals to quash patently illegal orders.
Statutory Reference: Central Goods and Services Tax Act, 2017, ss. 74A(5), 74A(8) & 75(4)
Facts of the Case: The assessee was served with a show-cause notice demanding tax, interest, and penalties. The adjudicating authority subsequently passed an adverse assessment order—and a subsequent rectification order—imposing these liabilities without affording the assessee a personal hearing after the notice was issued. Crucially, the final assessment order was passed prematurely, well before the expiry of the statutory window available to the assessee to voluntarily pay the demanded tax and interest to conclude the proceedings without incurring a penalty. The Revenue defended the orders by pointing to a hearing granted on a distinct issue prior to the notice and argued that the assessee should be relegated to the standard statutory appellate remedy rather than invoking writ jurisdiction.
Issue: Whether an assessment order passed without granting a post-notice personal hearing and before the expiry of the statutory period for voluntary compliance can be sustained, and whether the existence of an alternate appellate remedy bars a writ petition in such circumstances?
Held (The Ruling):
• The Court quashed the assessment and rectification orders, holding that the failure to grant a personal hearing when an adverse decision is contemplated is a direct violation of both the statutory mandate and the principles of natural justice. • Passing a final order before the expiration of the statutory window provided to the assessee to avoid penalties was deemed a blatant breach of law, permitting the assessee to bypass the standard appellate remedy based on established judicial exceptions [Available in Full Commentary]. • Taking strong exception to the Department's failure to take corrective steps upon being notified of the petition, the Court imposed exemplary litigation costs on the Revenue, directing that the amount be recovered directly from the erring officer's personal account.