2023 (10) TMI 479 - HC - GST

Maintainability of appeal - appeal dismissed as being beyond limitation - opportunity of hearing - violation of principles of natural justice - HELD THAT - Section 75(4) of the GST Act mandates the granting of an opportunity of hearing where an adverse decision is contemplated against a person. This provision was also interpreted by this Court in the case of PARTY TIME HOSPITALITY PROP. SMT. PUNITA GUPTA LKO. VERSUS STATE OF U.P. THRU PRIN. SECY. TAX AND REGISTRATION LKO AND 2 OTHERS 2023 (9) TMI 48 - ALLAHABAD HIGH COURT and the Court was of the view that compliance of Section 75(4) of GST Act is mandatory; while doing so, this Court had also considered the earlier judgments of this Court. Considering the fact that the original order is contrary to the mandate of Section 75(4) of GST Act and is also violative of principles of natural justice, the order dated 29.08.2022 is liable to be quashed and is accordingly quashed - As the impugned order has been quashed, order dated 02.09.2023 is also quashed. Matter is remanded to respondent no.3 to pass fresh orders after giving an opportunity of hearing and after permitting the petitioner to file a reply to the show-cause notice, in accordance with law - Petition allowed by way of remand.

Summary

Issues involved:
The issues involved in the judgment are the dismissal of an appeal under Section 107 of GST Act as beyond limitation and the creation of a demand under Section 73(9) of GST Act without providing an opportunity of hearing.

Dismissal of appeal under Section 107 of GST Act:
The petitioner challenged the order dated 02.09.2023, which dismissed the appeal under Section 107 of GST Act as beyond limitation. The petitioner contended that they are a bonafide firm conducting business lawfully and claimed ITC. A notice was served on 06.08.2021 regarding discrepancies in the return after scrutiny. The record showed that a show-cause notice under Section 73 of GST Act was sent to the petitioner on 28.06.2022, followed by a reminder on 22.08.2022. An order was passed on 29.08.2022 without granting a hearing as mandated by Section 75(4) of GST Act. The appeal against this order was dismissed due to being beyond the prescribed period of limitation.

Creation of demand under Section 73(9) of GST Act without hearing:
The petitioner challenged the order dated 29.08.2022 where a demand was created under Section 73(9) of GST Act without providing an opportunity of hearing. The petitioner emphasized challenging the original order confirming the demand under Section 73(9) of GST Act without a hearing. The notices issued did not mention the date, time, or venue of the personal hearing, and no personal hearing was granted as per the standing counsel's statement. The Court held that Section 75(4) of GST Act mandates granting an opportunity of hearing when an adverse decision is contemplated, citing previous interpretations and judgments. The original order was deemed contrary to the mandate of Section 75(4) and violative of natural justice principles, leading to its quashing.

Remand and fresh orders:
The Court quashed the order dated 29.08.2022 and subsequently the order dated 02.09.2023 as a result. The matter was remanded to respondent no.3 to pass fresh orders after providing an opportunity of hearing and allowing the petitioner to respond to the show-cause notice in compliance with the law. Ultimately, the petition was allowed in the mentioned terms.