Kapoor Marketing Vs State of U.P (Allahabad High Court)
The Allahabad High Court (Allahabad High Court) heard a writ petition challenging an assessment order dated 06.08.2024 passed by the Commercial Tax Officer, on the ground that it was issued in violation of the principles of natural justice and without granting a mandatory personal hearing under Section 75(4) of the GST Act.
The petitioner, a registered GST dealer operating as a proprietorship firm, stated that it maintained regular books of account and subsequently closed its business on 27.03.2024 due to losses. The GST registration was surrendered, and Form GST REG-19 issued on 18.04.2024 recorded the effective cancellation date as 27.03.2024. Thereafter, a show cause notice dated 13.05.2024 under Section 73 of the GST Act for the assessment year 2019–20 was issued, requiring a reply by 13.06.2024. The petitioner contended that the notice did not specify the date, time, or venue of personal hearing, despite statutory requirements and departmental circulars.
It was further submitted that because the business had closed and the GST registration was surrendered, the petitioner did not become aware of the Section 73 notice. The assessing authority proceeded to adjudicate the matter and imposed a tax demand of ₹97,000, including interest of ₹80,412 and penalty of ₹20,000, without considering that the business had already been closed. The petitioner did not file a statutory appeal, asserting that the order itself was vitiated for non-compliance with Section 75(4), which mandates an opportunity of hearing where an adverse decision is contemplated.
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