Jagjit Enterprises Private Ltd. Vs State of U.P. (Allahabad High Court)
The present petition was filed by Jagjit Enterprises Private Ltd., challenging two specific orders:
1. The order dated 31.12.2023 passed under Section 73 of the U.P. Goods and Services Tax Act, 2017 (the GST Act).
2. The order dated 23.09.2025 by which the petitioner’s appeal was dismissed as being beyond limitation.
The central contention of the petitioner’s counsel was that no opportunity of personal hearing was granted before the order dated 31.12.2023 was passed under Section 73 of the GST Act. The counsel argued that in the absence of such an opportunity, the impugned order cannot be sustained. This argument was supported by referencing a previous Division Bench judgment of the same court in Writ Tax No.303 of 2024 [Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr; 2024:AHC:38820-DB].
The Learned Standing Counsel for the State conceded, based on instructions, that “no date was fixed for personal hearing” regarding the issue of opportunity of hearing.
The High Court then noticed and relied upon the observations made by its Division Bench in the Mahaveer Trading Company case. Key points from that judgment, which deal with the mandatory nature of personal hearing, include:
- It is basic to procedural law under taxing statutes that an opportunity of personal hearing must be provided to an assessee before any assessment or adjudication order is passed against them.
- The Division Bench found it “strange and wholly unacceptable” that revenue authorities were failing to observe this mandatory procedural requirement simply because the substantive law had changed, thereby denying the opportunity of hearing.
- Section 75(4) of the Act mandates: “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.”
- In the Mahaveer Trading Company case, the record showed the petitioner appeared on three dates, filed replies, and the adjudicating authority subsequently passed a merit order without issuing any further notice or granting an opportunity of personal hearing.
- The Additional Chief Standing Counsel in that case had fairly submitted that due to similar occurrences noticed in other litigation, the Commissioner, Commercial Tax, Uttar Pradesh, had issued Office Memo No. 1406 dated 12.11.2024 to all field formations for necessary compliance.
This Office Memo highlighted practices that needed to be discontinued, including:
1. Mentioning only “N.A.” (Not Applicable) without mentioning the date or time of personal hearing.
2. Fixing the date of personal hearing prior to or on the same date as the reply to the Show Cause Notice, which was termed non-est (non-existent/void). The date of the reply must be definitely prior to the date of the personal hearing.
3. Passing the final order (u/s 73(9)/74(9) etc.) on a date that is not commensurate to the date of personal hearing. The memo stressed that the date of the order “has to be passed on the date of personal hearing.”
The Mahaveer Trading Company judgment concluded that personal hearing must be offered to the noticee before any adverse order is passed in an adjudication proceeding. Exceptions exist only if the noticee chooses to waive that right or fails to avail the opportunity after it is granted.
