HC: Non-consideration of reply to audit sans personal hearing amounts to breach of natural justice
Adama India Pvt. Ltd. vs. UOI & Ors. WRIT PETITION NO.103813 OF 2024 (T-RES)

Facts of the Case:
Issue:
▪ The petitioner, Adama India Pvt. Ltd., received a notice pursuant to an audit report.
▪ The petitioner filed a reply and submitted proper documents.
▪ The authorities issued a demand for tax, interest, and penalty without considering the reply or the documents and without affording a personal hearing.
▪ The petitioner claimed that this procedure breached the principles of natural justice and their fundamental rights.

Court Judgement:
Decision:
▪ Mandatory Provisions: The Karnataka High Court emphasized that Sections 73(9), 73(10), and Section 75(4) of the CGST Act mandate the authorities to provide an opportunity for the assessee to file a reply, consider the reply, and afford a personal hearing.

▪ Violation of Natural Justice: The Court noted that the non-consideration of the reply and the failure to provide a personal hearing constituted a breach of the petitioner's fundamental rights and principles of natural justice.

▪ Remittance and Costs: The matter was remitted back to the authorities for fresh consideration, subject to the petitioner paying costs of Rs. 50,000 to the respondent/Revenue on the next date of hearing.

▪ Statutory Intent: The Court highlighted that issuing a demand without considering the representation goes against the intent and object.