B L Pahariya Medical Store Vs State of U.P. (Allahabad High Court)
The recent case of B.L. Pahariya Medical Store v. State of U.P [Writ Tax No. 981 of 2023 dated August 22, 2023 has cast light on a pivotal issue in the realm of judicial proceedings: the significance of the opportunity for a personal hearing before passing an adverse order. The Hon’ble Allahabad High Court’s determination brings clarity to the expectations of the Adjudicating Authority.
Hon’ble Allahabad High Court set aside the demand order passed by the Adjudicating Authority and held that, the assessee is not required to request for opportunity of personal hearing, and it remained mandatory upon Adjudicating Authority to afford such opportunity before passing an adverse order.
Facts:
B.L. Pahariya Medical Store (“the Petitioner”) was served a Show Cause Notice on July 12, 2022 (“the SCN”) by the Revenue Department (“the Respondent”) seeking his reply within 15 days.
The Petitioner filed the reply to the SCN on December 30, 2022.
The Adjudicating Authority passed an order dated March 21,2022 (“the Impugned order”), whereby demand and penalty of INR 26 crores has been confirmed against the Petitioner.
The Petitioner relied upon the Judgement of Bharat Mint & Allied Chemicals v. Commissioner Commercial Tax & 2 Ors. [(2022) 48 VLJ 325] and on Section 75(4) of the Central Goods and Services Tax Act (“the CGST Act”) and contended the Adjudicating Authority was bound to afford opportunity of personal hearing to the Petitioner before he may have passed an adverse assessment order.
The Petitioner relied upon the Judgement of M/s Hitech Sweet Water Technologies Pvt. Ltd. v. State of Gujarat, [2022 UPTC (Vol. 112) 1760] wherein the Hon’ble Gujarat High Court set aside the Impugned Order on the ground that the lower authority was non-compliant of principles of natural justice in form of not giving opportunity of personal hearing.
Issue:
Whether the Adjudicating Authority can pass order without offering opportunity of being heard?
Held:
The Hon’ble Allahabad High Court in Writ Tax No. 981 of 2023 held as under:
