Yashika AD Agency Vs Commissioner (Uttarakhand High Court)
The writ petitions concerned a challenge to assessment proceedings where the tax authority fixed a personal hearing before the expiry of the time granted to file a reply to a show cause notice. The petitioners relied on an earlier decision of the same Bench dated 21 April 2025 in a similar matter. In that case, a show cause notice was issued seeking explanations for differences between outward supplies reported in GSTR-1 and values reflected in e-way bills for a particular financial year. The assessee submitted a reply to the initial notice. Subsequently, a demand notice in Form DRC-01 was issued proposing confirmation of tax with interest, fixing a date for personal hearing prior to the last date allowed for filing a reply. The assessee sought adjournment of the hearing, citing the need to collate relevant records, but the request was rejected.
The Court held that fixing a personal hearing before the deadline for submitting a reply was procedurally flawed and contrary to the statutory scheme. It observed that a personal hearing necessarily follows consideration of the reply, and insisting on a hearing before submission of a reply amounted to “putting the cart before the horse.” On a conjoint reading of Sections 73, 74, and 75 of the CGST Act, particularly sub-sections (4) and (5) of Section 75, the Court found that the statute mandates an opportunity of hearing and permits adjournments, subject to limits, where sufficient cause is shown. Section 75 was noted to govern procedural safeguards in assessment proceedings, especially where tax is alleged to have escaped assessment.
