Case Law Details
Abuturrab Agencies Vs Commissioner, State Tax and another (Uttarakhand High Court)
The Uttarakhand High Court allowed a writ petition challenging an assessment order dated 21 August 2024 passed under Section 73(9) of the CGST Act/UKGST Act. The impugned order had raised a demand of ₹7,97,278 towards tax, along with interest of ₹7,49,442 and penalty of ₹79,728, aggregating to ₹16,26,448.
The petitioner contended that the show cause notice issued on 9 May 2024 granted time until 9 June 2024 for filing a reply. However, the same notice fixed the date of personal hearing on 27 May 2024, which was prior to the last date prescribed for submitting the reply. According to the petitioner, such a procedure was wholly illegal, as an effective opportunity of hearing could not be provided before the expiry of the period allowed for filing objections.
The petitioner further submitted that the show cause notice had not been served through any physical mode and had only been uploaded on the GST portal, due to which the petitioner was unaware of the proceedings.
Reliance was placed on an earlier judgment of the Coordinate Bench in M/s Modine Thermal Systems Private Limited v. State of Uttarakhand and others, wherein it was observed that the scheme of Sections 73, 74 and 75 of the GST enactments contemplates a meaningful opportunity of hearing. The Court had held that where a statute prescribes a particular manner for performing an act, it must be performed only in that manner. The provisions of Section 75 also recognize the assessee’s right to seek adjournments, subject to statutory limitations.
The Revenue was unable to dispute that fixing the personal hearing before the deadline for filing the reply rendered the opportunity of hearing ineffective and resulted in a breach of the principles of natural justice.
Accepting this position, the High Court held that the assessment order could not be sustained. The order dated 21 August 2024 was quashed, and the matter was remitted to the Assessing Officer to recommence proceedings from the stage of the show cause notice. The Assessing Officer was directed to provide the petitioner with an opportunity to submit a reply and thereafter fix a date for personal hearing in accordance with law.
Accordingly, the writ petition and all pending applications were disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF UTTARAKHAND HIGH COURT
1. Heard Shri Tarun Pande and Shri Ashish Agarwal, learned counsel for the petitioner-firm, and Ms. Puja Banga, learned counsel for the respondents-State.
2. The petitioner-firm has assailed the order dated 21.08.2024 passed by respondent no. 2, under Section 73(9) of the C.G.S.T Act/ UKGST Act, demanding tax of Rs. 7,97,278/-, along with interest of Rs. 7,49,442/- and penalty of Rs. 79,728/-, total sum of Rs. 16,26,448/-.
3. The case of the petitioner-firm is that a show cause notice was issued to the petitioner-firm on 09.05.2024, whereby time was granted to the petitioner-firm to submit its reply by 09.06.2024. By the same notice, date of personal hearing was fixed for 27.05.2024, i.e., before the date fixed for submission of reply.
4. The contention of learned counsel for the petitioner-firm is that the date of personal hearing could not have been fixed before the date fixed for submission of reply. The procedure adopted by the respondents was, therefore, wholly illegal.
5. The further submission is that the show cause notice was not served upon the petitioner-firm by any physical mode, but by uploading the same on the GST portal, and the petitioner-firm could not come to know of the same.
6. Learned counsel for the petitioner-firm placed reliance on a judgment of Coordinate Bench in Writ Petition (M/B) No. 123 of 2025, M/s Modine Thermal Systems Private Limited v. State of Uttarakhand and others, in support of the submission that the date of personal hearing could not be prior to the date fixed for submission of reply to the show cause notice. The relevant extract from the said judgment is as follows:
“5) A conjunctive reading of Section 73, 74 and 75 makes it apparent that the approach adopted by the Authority is contrary to the scheme of the Act. SubSection 4 and 5 of Section 75 of the Act reads as under:-
“75.(4) An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.
(5) The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing: Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.”
6) The scheme of the Act enables the assessee to seek for adjournment not in excess of three times and it is pertinent to note that sub-section 5 succeeds subsection 4, which enables the assessee to seek for a personal hearing. Section 75 relates to the procedural aspect that is required to be followed by the Authorities in the matter of determination of assessment, more particularly, of tax that has escaped assessment.
7) If the statute stipulates a matter to be performed in a particular manner, the same shall be performed in that manner only. Law in this regard is no more res integra and is well-settled by catena of judgments of the Apex Court.”
7. Learned counsel for the Revenue Ms. Puja Banga is not in a position to dispute that, since date for personal hearing was fixed prior to the date of submission of reply, therefore, personal hearing allegedly afforded was not effective and, has resulted in breach of principles of natural justice.
8. Consequently, the order of assessment cannot sustain and is, hereby, quashed. The matter is remitted back to the Assessing Officer to proceed from the stage of show cause notice, and grant opportunity to the petitioner-firm to file its reply and, thereafter, fix a date for personal hearing.
9. Accordingly, the Writ Petition stands disposed of.
10. All pending applications stand disposed of accordingly.
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