This Tax Alert summarizes a recent ruling of the Bombay
High Court (HC)1. The issue relates to validity of an order passed
by National Anti-profiteering Authority.
The petitioner contended that the matter was heard by
only three members whereas the impugned order was signed by four members,
resulting in a breach of the principles of natural justice.
Revenue argued that as per Central Goods and Services
Tax Rules 2019, no act or proceedings of the Authority shall be invalid merely
on the ground of any irregularity in the procedure followed by the Authority
not affecting the merits.
HC observed that the Authority is bound by the
principles of natural justice. Further, the rule that one who hears must pass
the order remains the basic proposition and this is a settled position of law.
HC concluded that when three members of the Authority
had heard the petitioner, signing of the order by a fourth member results in
violation of the principles of natural justice and thus, the order is liable to
be set aside.
The ruling may have bearing on all such cases where the
Authority has not followed the proper procedure.
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