2024 (10) TMI 1449 - HC - GST

Challenge to order passed u/s 74(9) of the Uttar Pradesh Goods and Services Tax Act, 2017 - denial of opportunity for a personal hearing - violation of principles of natural justice - HELD THAT - The factual matrix is such that the matter is squarely covered by a coordinate Bench judgment of this Court in MAHAVEER TRADING COMPANY VERSUS DEPUTY COMMISSIONER STATE TAX AND ANOTHER 2024 (3) TMI 334 - ALLAHABAD HIGH COURT where it was held that ' Thus, the impugned order cannot be sustained in the eyes of law. It has been passed in gross violation of fundamental principles of natural justice. The self imposed bar of alternative remedy cannot be applied in such facts. If applied, it would be of no real use. In fact, it would be counter productive to the interest of justice. Here, it may be noted, the appeal authority does not have the authority to remand the proceedings.' Upon a perusal of record, it appears that the factual matrix is very similar to one in Mahaveer Trading Company's case. There are no reason to take a different stand. The impugned order dated June 8, 2023 is quashed and set-aside with a direction given to the officer concerned to grant the petitioner another opportunity of filing a fresh reply and thereafter fix a date of hearing and pass a reasoned order - Petition disposed off.

Summary

Issues:
1. Challenge to the order passed under Section 74(9) of the Uttar Pradesh Goods and Services Tax Act, 2017.
2. Violation of principles of natural justice.
3. Remedies available in case of denial of opportunity for a personal hearing.
4. Quashing and setting aside the impugned order.

Detailed Analysis:
1. The writ petition under Article 226 challenges the order dated June 8, 2023, passed under Section 74(9) of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner was aggrieved by this order, leading to the legal proceedings before the High Court.

2. The Court noted that the factual matrix of the case was similar to a previous judgment by a coordinate Bench in Mahaveer Trading Company vs. Deputy Commissioner State Tax. The judgment emphasized the importance of offering a personal hearing to the noticee before passing any adverse order in an adjudication proceeding. Denial of this opportunity was considered a violation of fundamental principles of natural justice, rendering the impugned order unsustainable in the eyes of the law.

3. The Court highlighted that before passing an adverse order in an adjudication proceeding, a personal hearing must be offered to the noticee. Even if the noticee waives this right or fails to avail the opportunity, the practice of denying a personal hearing was deemed unacceptable. The judgment clarified that the appeal authority does not have the power to remand proceedings in such cases, emphasizing the significance of following natural justice principles.

4. Consequently, the Court quashed and set aside the impugned order dated June 8, 2023. The officer concerned was directed to grant the petitioner another opportunity to file a fresh reply, schedule a date for a hearing, and pass a reasoned order. The Court mandated that this entire process should be completed within a period of two months from the date of the judgment, thereby providing relief to the petitioner and ensuring compliance with principles of natural justice.

5. In conclusion, the writ petition was disposed of in favor of the petitioner, emphasizing the importance of upholding procedural fairness and granting adequate opportunities for a personal hearing before reaching any adverse conclusions in adjudication proceedings under the tax legislation.