Section 74 of the CGST Act, 2017 – Demand — Personal Hearing -- The petitioner challenged the proceedings dated 10.11.2022 under Section 74(5) of the Act, directing the petitioner to pay Rs.56,95,19,461/- towards differential tax, interest and penalty for evasion of the due tax as illegal and arbitrary. The GST was calculated on the entire payment received by the petitioner, though the liability of the petitioner is only on the service charges being paid and received by the petitioner. The counsel for the petitioner submitted that wages, ESI and EPF, will not form part of the value of the taxable supply of the services as these were paid to the respective employees and the amounts were paid towards ESI and EPF to discharge the statutory obligation and the petitioner has not retained those amounts. The court observed that the 3rd respondent has extended some opportunity to the petitioner for personal hearing. The fact remains that the petitioner could not avail the said opportunity in view of her old age as she being aged 75 years and also due to her ill health. Having regard to a high tax amount plus interest and penalty proposed to be laid. The 3rd respondent ought to have extended some more opportunity to the petitioner for personal hearing.

Held that:- The Hon’ble High Court set aside the impugned Assessment Order dated 10.11.2022 on the condition of petitioner depositing 50% of tax component of Rs.23,79,26,090/-, within six weeks. Upon such deposit, the 3rd respondent shall fix a date for personal hearing of the petitioner and, pass an appropriate Assessment Order in accordance with the law.