In the matter of Ocean Sparkle Ltd. vs Assistant Commissioner citied in [2021] 129taxmann.com 186 (Andhra Pradesh), the assesse failed to respond to the show cause notice issued under section 73 and the competent authority passed an order confirming demand on it. As per the learned counsel for the petitioner the impugned order of assessment passed by the 1^st Respondent is liable to be set aside on the mere ground of non compliance of the provisions of section 75(4). On the other hand, it is strongly contended by the advocate representing the respondent, failing to respond to the show cause notice, it is not open for the petitioner herein to raise any objection as to the impugned order of assessment.

During the course of argument, it is brought to the notice of the Court that the petitioner couldn’t file the objections to the show cause notice within the time stipulated due to the certain reasons as mentioned in the written Affidavit. The court refers to the provisions of the section 75 General provision relating to the determination of tax CGST Act,2017 which states:

“an opportunity of hearing shall be granted where a request is received in writing from the person chargeable to tax or penalty or where such adverse decision is contemplated against such person”.

It is apparent from the provision of the law that opportunity of hearing is required to be granted where a request is received in writing from the person chargeable with tax or penalty or where any adverse decision is contemplated against such person. In the instant case , admittedly proposing an adverse action, by way of a show cause notice, 1^st Respondent initiated action under the above provision of the law. It is evident from the reading of the impugned order that on the ground that the petitioner herein failed to respond by way of filling of the objections, 1^st Respondent herein confirmed the demands. When such a course of action is adopted by 1st respondent herein prejudicial to the interest of the assessee, the mandatory requirements of law as provided under sub-section (4) of section 75 of the CGST Act, 2017 are required to be followed scrupulously. Therefore, the impugned order, in the considered opinion of this Court, is liable to be set aside not only on the ground of deviation from the mandatory provisions under sub-section (4) of section 75 of the CGST Act, 2017 but also on the ground of violation of principles of natural justice.

For the aforesaid reasons, the writ petition is allowed setting aside the order of assessment passed by the 1^st Respondent and remanding the matter to 1st respondent for consideration of the issue and for passing appropriate orders afresh after giving notice of hearing to the petitioner indicating the date and time of personal hearing.

It was held that when an adverse decision is contemplated against an assessee opportunity of hearing to such assessee becomes necessary and is to be followed meticulously as per Section 75(4).