2025 (1) TMI 924 - HC - GST

Appeal preferred by the petitioner under Section 107 of GST Act was dismissed as being beyond limitation - availment of ITC by mistake but the same is not utilised - 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. v. State Of U.P. 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 25.03.2023 is liable to be quashed and is accordingly 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.

2023 (9) TMI 48 - HC

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the order dated 25.03.2023, passed under Section 74 of the GST Act, is valid despite the alleged non-compliance with the mandatory requirement of granting a personal hearing as per Section 75(4) of the GST Act.
Whether the dismissal of the appeal on the grounds of limitation, as per the order dated 04.12.2024, was justified.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of the Order under Section 74 of the GST Act

Relevant Legal Framework and Precedents: The primary legal provision in question is Section 75(4) of the GST Act, which mandates that an opportunity of hearing must be provided when an adverse decision is contemplated against a person. The court referenced its previous decision in the case of Party Time Hospitality, which emphasized the mandatory nature of this provision.
Court's Interpretation and Reasoning: The court interpreted Section 75(4) as a mandatory provision, requiring compliance to uphold the principles of natural justice. The absence of a personal hearing in the proceedings leading to the order dated 25.03.2023 was seen as a violation of this mandate.
Key Evidence and Findings: The notices issued to the petitioner did not specify the date, time, or venue for a personal hearing, with "NA" transcribed in those sections. The standing counsel confirmed that no personal hearing was granted.
Application of Law to Facts: The court applied Section 75(4) to the facts, concluding that the failure to provide a personal hearing rendered the order under Section 74 invalid.
Treatment of Competing Arguments: The petitioner's argument centered on the lack of opportunity for a hearing, which was unopposed by the standing counsel, who confirmed the procedural lapse.
Conclusions: The court concluded that the order dated 25.03.2023 was contrary to the mandate of Section 75(4) and violated principles of natural justice, thus it was quashed.

Issue 2: Dismissal of Appeal on Grounds of Limitation

Relevant Legal Framework and Precedents: The appeal was dismissed for being beyond the prescribed period of limitation, as per the procedural requirements under the GST Act.
Court's Interpretation and Reasoning: The court did not delve deeply into the limitation issue, as the primary focus was on the procedural impropriety of the original order.
Key Evidence and Findings: The appeal was dismissed without addressing the substantive issues due to the limitation period.
Application of Law to Facts: The court found that since the original order was quashed, the subsequent appeal dismissal was also without basis.
Treatment of Competing Arguments: The court did not address any specific arguments regarding the limitation, as the quashing of the original order rendered the appeal moot.
Conclusions: The order dated 04.12.2024, dismissing the appeal, was also quashed as a consequence of the original order being set aside.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "Section 75(4) of the GST Act mandates the granting of an opportunity of hearing where an adverse decision is contemplated against a person."
Core Principles Established: The judgment reinforced the principle that procedural fairness, including the right to a personal hearing, is a fundamental requirement under the GST Act when adverse decisions are made.
Final Determinations on Each Issue: The court quashed both the original order under Section 74 and the dismissal of the appeal, remanding the matter to the respondent to pass fresh orders after providing an opportunity for a hearing.

Overall, the judgment underscores the importance of adhering to procedural requirements and principles of natural justice in administrative proceedings under the GST Act.

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