Prakash Iron Store Vs State of U.P. (Allahabad High Court)
In the case of Prakash Iron Store Vs State of U.P., the Allahabad High Court addressed a petition challenging the GST demand and the subsequent appellate decision. The petitioner, a firm engaged in business, had mistakenly availed Input Tax Credit (ITC), which was not utilized. The petitioner filed a corrected return in July 2019 to rectify the mistake. However, a show-cause notice was issued in December 2021, proposing a liability of ₹2,98,333 for the Financial Year 2017-18, based on a survey conducted in August 2019. The petitioner contested the demand, asserting that the mistake was bona fide and sought a personal hearing, but the order under Section 74 of the GST Act was passed without providing the opportunity for a hearing, as mandated by Section 75(4) of the GST Act.
The petitioner filed an appeal against the order, but it was dismissed on April 24, 2024. The central issue was that the GST authorities did not grant a personal hearing despite the petitioner’s request. The show-cause notice indicated the deadline for submission of a reply but failed to mention the date, time, or venue for a personal hearing, as evidenced by the notices where “NA” was written in the relevant columns. The Standing Counsel confirmed that no hearing was granted, which was a violation of the provisions of the GST Act.
