ALLAHABAD HIGH COURT
Ishwar Deen Auto Mobiles …..Appellant
V/s
Assistant Commissioner State Tax …..Respondent
Honble Justice
Shekhar B. Saraf and Manjive Shukla, JJ.
Date : 13/09/2024
Appearance:
Nitin Kumar Kesarwani, Shubhanjali Gupta for the Petitioner.
C.S.C. for the Respondent.
In Favour of Assessee
Issues Involved :- The petitioner challenged the order passed under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, on the grounds of denial of a personal hearing. Following a similar judgment in the Mahaveer Trading Company case, the court quashed the impugned order, holding that it violated the principles of natural justice. The case is remanded to the adjudicating authority with instructions to provide a proper hearing before passing a fresh order.
Section: Section 73 of the Central Goods and Services Tax Act, 2017.
Subject: Denial of personal hearing in adjudication proceedings and violation of natural justice principles.
Matter Involved: The petitioner contended that the impugned order passed under Section 73 of the GST Act denied them the opportunity for a personal hearing. The petitioner argued that this omission violated the fundamental principles of natural justice, as established in a similar case (Mahaveer Trading Company). The court had to decide whether the adjudicating authority’s failure to offer a hearing invalidated the order passed.
Held by Court: The court held that the adjudication process under Section 73 requires a personal hearing to ensure compliance with natural justice principles. Since the opportunity for a hearing was denied, the court quashed the impugned order. It directed the respondent to allow the petitioner to file a fresh reply, followed by a proper hearing, and to pass a reasoned order within two months. The court emphasized that justice would be compromised if such practices are allowed to continue.
Case referred/cited :-
Mahaveer Trading Company Versus Deputy Commissioner State Tax and another
JUDGMENT
1. This is a writ petition under Article 226 of the Constitution of India wherein the writ petitioner is aggrieved by the order dated 16.12.2023 passed by the respondent under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017.
2. We have heard counsel appearing on behalf of the parties.
3. The factual matrix is such that the matter is squarely covered by a coordinate Bench judgment of this Court in Mahaveer Trading Company vs. Deputy Commissioner State Tax and another, Neutral Citation. Relevant portion of the aforesaid judgment is delineated below:
“10. On query made, the learned Additional Chief Standing Counsel fairly submits, in light of similar occurrences, noticed in other litigation, he had apprised the Commissioner, Commercial Tax. In turn, the Commissioner, Commercial Tax, Uttar Pradesh, has issued Office Memo No. 1406 dated 12.11.2024. The same has been addressed to all Additional Commissioner to be communicated to all field formations for necessary compliance. A copy of the same has been made available to this Court. It reads as below:
“1. The column in which date of personal hearing has to be mentioned, only N.A. is mentioned without mentioning any date.
2. The column in which time of personal hearing has to be mentioned, only N.A. is mentioned without mentioning time of hearing.
3. In some cases, the date of personal hearing is prior to which reply to the Show Cause Notice has to be submitted this is non-est and this practice has to be discontinued. The date of reply to the Show Cause Notice has to be definitely prior to the date of personal hearing.
4. In some cases, the date of personal hearing is on the same date to which reply to the Show Cause Notice has to be submitted-this is non-est and this practice has to be discontinued. The date of reply to the Show Cause Notice has to be definitely prior to the date of personal hearing.
5. In all cases observed, the date of passing order either u/s 73(9)/74(9) etc. of the Act is not commensurate to the date of personal hearing. It is trite law that the date of the order has to be passed on the date of personal hearing. For eg.,the date of furnishing reply to SCN is 15.11.2023 and date of personal hearing is 17.11.2023, then the date of order has to be 17.11.2023″
11. In view of the facts noted above, before any adverse order passed in an adjudication proceeding, personal hearing must be offered to the noticee. If the noticee chooses to waive that right, occasion may arise with the adjudicating authority, (in those facts), to proceed to deal with the case on merits, ex-parte. Also, another situation may exist where even after grant of such opportunity of personal hearing, the noticee fails to avail the same. Leaving such situations apart, we cannot allow a practice to arise or exist where opportunity of personal hearing may be denied to a person facing adjudication proceedings.
12. Thus, the impugned order cannot be sustained in the eyes of law. It has been passed in gross violation of fundamental principles of natural justice. The self imposed bar of alternative remedy cannot be applied in such facts. If applied, it would be of no real use. In fact, it would be counter productive to the interest of justice. Here, it may be noted, the appeal authority does not have the authority to remand the proceedings.”
4. Upon a perusal of record, it appears that the factual matrix is very similar to one in Mahaveer Trading Company`s (supra). We do not see any reason to take a different stand.
5. Accordingly, the impugned order dated 16.12.2023 is quashed and set-aside with a direction given to the officer concerned to grant the petitioner another opportunity of filing a fresh reply and thereafter fix a date of hearing and pass a reasoned order. The entire exercise should be completed within a period of two months from date.
6. The writ petition is disposed of.