2024 (9) TMI 1643 - HC - GST

Maintainability of petition - availability of remedy of appeal u/s 107 of the Act - violation of Section 75(4) of UPGST Act - denial of opportunity of personal hearing - violation of principles of natural justice - HELD THAT - It is basic to procedural law under taxing statutes that opportunity of personal hearing must be provided to an assessee before any assessment/adjudication order is passed against him. Thus, it is strange and wholly unacceptable merely because the substantive law has changed, the revenue authorities have changed their approach and are failing to observe the mandatory requirement of procedural law. They have thus denied opportunity of hearing to the assessee. It transpires from the record, neither the adjudicating authority issued any further notice to the petitioner to show cause or to participate in the oral hearing, nor he granted any opportunity of personal hearing to the petitioner. Thus, 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. In the present case, show cause notice has been issued in the year 2019 and the impugned order has been passed in the year 2024. Inordinate delay of five years in passing the order impugned is clearly a manifestation and violation of principles of natural justice. The impugned order cannot be sustained in the eyes of law. It has been passed in gross violation of fundamental principles of natural justice - Petition allowed.

Summary

Issues:
Challenge to order under Section 73 read with Section 122 of the Uttar Pradesh Goods and Services Tax Act, 2017; Availability of remedy of appeal under Section 107 of the Act; Violation of Section 75(4) of the Act; Denial of opportunity of personal hearing; Inordinate delay in passing the order; Gross violation of principles of natural justice.

Analysis:

The judgment delivered by Hon'ble Manjive Shukla, J. of the Allahabad High Court pertains to a challenge raised against an order passed by the Deputy Commissioner, State Tax, Auraiya, Sector-1 Etawah under Section 73 read with Section 122 of the Uttar Pradesh Goods and Services Tax Act, 2017. The preliminary objection raised was regarding the availability of the remedy of appeal under Section 107 of the Act. The petitioner argued that there was a violation of Section 75(4) of the Act, emphasizing the importance of providing an opportunity of personal hearing to the assessee before passing any assessment or adjudication order.

It was highlighted that the revenue authorities failed to adhere to the mandatory requirement of procedural law by not granting the petitioner an opportunity of personal hearing. The judgment emphasized the significance of Section 75(4) of the Act, which mandates that an opportunity of hearing must be granted upon a written request from the person chargeable with tax or penalty or when any adverse decision is contemplated against such person. The court noted that the adjudicating authority did not issue any further notice or grant a personal hearing to the petitioner, which was a clear violation of procedural law.

The court also addressed the issue of inordinate delay in passing the order, as the show cause notice was issued in 2019, and the impugned order was passed in 2024, highlighting a five-year delay that violated principles of natural justice. The judgment emphasized that the impugned order could not be sustained due to the gross violation of fundamental principles of natural justice. It was stated that the self-imposed bar of alternative remedy could not be applied in such circumstances as it would be counterproductive to the interest of justice.

Consequently, the writ petition was allowed, and the impugned order dated 30.4.2024 was set aside. The matter was remitted to the Deputy Commissioner, State Tax, Auraiya, Sector-1 Etawah, to pass a fresh order in compliance with the law after affording due opportunity of hearing to the petitioner. The judgment underscored the importance of upholding procedural fairness and providing a fair chance for the parties to present their case before any adverse orders are passed.