2024 (5) TMI 403 - HC - GST

Maintainability of petition - availability of alternative remedy - Violation of principles of natural justice - no opportunity of personal hearing was granted - SCN does not provide any date, place and time of hearing despite the same being mandatory procedure. Availability of alternative remedy of appeal - HELD THAT - The Court thereafter observed that the stand taken by the respondents that the petitioner has alternative remedy of appeal under Section 107 of the Act cannot be accepted. Insofar as it is settled law that availability of alternative remedy, is not a complete bar to entertain a writ petition under Article 226 of the Constitution of India and has referred to exceptions that have been carved out to alternative remedy by the Hon'ble Supreme Court with regard to three cases i.e. (i) where there is complete lack of jurisdiction in the officer or authority to take the action or to pass the order impugned; or (ii) where vires of an Act, Rules, Notification or any of its provisions has been challenged; or (iii) where an order prejudicial to the writ petitioner has been passed in total violation of principles of natural justice. Opportunity of personal hearing - HELD THAT - The action taken against the petitioner under Section 74(9) of the Act does not provide for personal hearing to be given to the concerned person chargeable with tax or penalty. It only states that the proper officer shall after considering the representation, if any, made by the person chargeable with tax determine the amount of tax, interest and penalty due from such person and issue an order. It has been argued that sub-clauses of Section 75 of the Act relate to the procedure to be followed by the Officer after remand of the matter by the appellate authority or tribunal or the court and sub-section (4) should be read in that context and it requires that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty or where an adverse decision is contemplated against such person - the petitioner has also argued that Section 75(4) of the Act would be otiose as if this Court comes to the conclusion that the argument raised by the learned counsel for the State-respondents is liable to be accepted as Section 74(1) of the Act also contemplates issuance of a notice and calling for a reply. This Court having considered the submissions made by the learned counsel for the parties has gone through the leading judgment in the case of BHARAT MINT AND ALLIED CHEMICALS VERSUS COMMISSIONER COMMERCIAL TAX AND 2 OTHERS 2022 (3) TMI 492 - ALLAHABAD HIGH COURT and find that the said judgment although has read into the language of Section 75(4) of the Act and the right of personal hearing, it has not mentioned any causes omissus on the part of the legislature reading into the statute words like personal hearing as the Act itself only states that an opportunity of hearing shall be given. Order is reserved - Till pronouncement of the judgement, the impugned orders passed by the assessing authority shall remain stayed.

Summary

Issues Involved:
1. Validity of the impugned orders and show cause notice issued u/s 74 of the UPGST Act, 2017.
2. Compliance with the principles of natural justice and opportunity of personal hearing u/s 75(4) of the UPGST Act, 2017.

Summary:

Issue 1: Validity of the impugned orders and show cause notice issued u/s 74 of the UPGST Act, 2017.

The petitioner challenged the order and show cause notice issued u/s 74 of the UPGST Act, 2017, claiming non-compliance with procedural requirements. The petitioner argued that despite compliance with audit notices, no audit report was issued, and the show cause notice lacked details of hearing, violating the principles of natural justice. The respondents contended that the petitioner had a statutory remedy u/s 107 of the Act, which should be pursued.

Issue 2: Compliance with the principles of natural justice and opportunity of personal hearing u/s 75(4) of the UPGST Act, 2017.

The petitioner argued that u/s 75(4) of the Act, an opportunity of personal hearing is mandatory where requested or where an adverse decision is contemplated. The petitioner relied on judgments from Co-ordinate Benches in similar cases, emphasizing the necessity of personal hearings to ensure compliance with natural justice principles. The court examined Section 75(4) and related judgments, concluding that the statutory mandate for personal hearing was violated.

The court observed that the respondents' argument that no personal hearing was required under Section 74(9) was not tenable. The court highlighted that Section 75 provides general provisions for tax determination, applicable to actions under Sections 73 and 74, and mandates personal hearings.

The court reserved the order and stayed the impugned orders until the pronouncement of the judgment.