2023 (4) TMI 544 - HC - GST

Doctrine of merger - Opportunity of hearing not provided - proceedings were initiated under Section 74 against the petitioner - applicability of Sub-Section (4) of Section 75 of the U.P. GST Act - violation of principles of natural justice (audi alterem partem) - HELD THAT - The order dated 01.10.2020 also does not reveal that any personal hearing was accorded to the petitioner prior to passing of the order, as such, the inescapable conclusion from the material available on record is that petitioner was not granted personal hearing which is required and is mandatory under Section 75(4), as such, on that ground alone the order dated 01.10.2020 is quashed. The respondents shall be at liberty to conclude the proceedings in accordance with law afresh, if so advised. Petition allowed.

Summary

Issues involved:
The issues involve the legality of orders passed against the petitioner u/s 74 of the U.P. GST Act without granting an opportunity of hearing as mandated by Section 75(4) of the Act.

Issue 1 - Opportunity of Hearing:
The petitioner contended that no opportunity of hearing was granted before passing the order against him u/s 74 of the U.P. GST Act. The petitioner relied on Section 75(4) which mandates granting an opportunity of hearing where an adverse decision is contemplated, even if no specific request is made. Citing a previous judgment, the petitioner argued that personal hearing is mandatory before passing an adverse order. The Standing Counsel failed to show any evidence of a date fixed for hearing in the order sheet, which is a mandatory condition u/s 75(4). The order dated 01.10.2020 did not indicate any personal hearing being accorded to the petitioner, thus leading to the conclusion that the petitioner was denied a mandatory personal hearing. Consequently, the order dated 01.10.2020 was quashed, allowing the respondents to proceed in accordance with the law.

Issue 2 - Appeal Dismissal:
The petitioner's appeal against the order dated 01.10.2020 was dismissed for failure to deposit the required amount. The Court noted that while the appeal conditions are statutory, the dismissal without consideration does not trigger the doctrine of merger. As the appeal was dismissed due to non-compliance with the deposit condition, the Court found no fault with the order dated 28.11.2020. However, since the appeal was dismissed without consideration, the order dated 01.10.2020 was not deemed to have merged with the later order. Given the challenge to the order dated 01.10.2020, the Court decided to consider it on its merits. Writ Petition No. 408 of 2023 was also allowed, quashing the impugned order dated 22.10.2021 on similar grounds as the first petition.