Case Law Details
M/S Jai Vindhya Udyog Thru. Its Partner Niraj Kumar Agarwal Vs State of U.P. (Allahabad High Court)
In the case of Jai Vindhya Udyog Vs State of U.P., the Allahabad High Court addressed the validity of orders passed under the GST Act. The petitioner challenged a demand order dated 29.08.2022 issued under Section 73(9) of the GST Act, claiming it was passed without granting an opportunity for a hearing, as required by Section 75(4) of the Act. The subsequent dismissal of the petitioner’s appeal due to the lapse of the limitation period under Section 107 further complicated the matter. The Court examined the records and noted that neither the original show-cause notice nor the reminder mentioned the date, time, or venue for a personal hearing, instead marking them as “NA.” This omission violated the principles of natural justice and the mandatory provision under Section 75(4).
The Court referred to its previous judgment in Party Time Hospitality Prop. Smt. Punita Gupta Lko. v. State of U.P., reinforcing that granting an opportunity for a hearing is obligatory before an adverse decision. It quashed the demand order and the appeal dismissal order, remanding the matter to the adjudicating authority to pass a fresh order. The Court directed that the petitioner be provided an opportunity to file a reply and be heard in accordance with the law. This judgment underscores the importance of adhering to statutory provisions and natural justice principles in GST proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Shri Pranjal Shukla, learned counsel for the petitioner, learned Standing Counsel and perused the records produced by learned Standing Counsel in terms of the order passed by this Court on 03.10.2023.
2. By means of the present petition, the petitioner has challenged the order dated 09.2023 whereby the appeal preferred by the petitioner under Section 107 of GST Act was dismissed as being beyond limitation.
The petitioner has also challenged the order dated 29.08.2022 passed by respondent no.3 whereby a demand has been created under Section of 73(9) of GST Act.
3. Submission of learned counsel for the petitioner is that the petitioner is a bonafide firm doing its business in accordance with law and claimed ITC. It is stated that a notice was served on 08.2021 intimating discrepancies in the return after scrutiny.
4. From the record, it appears that a show-cause notice under Section 73 of GST Act was sent to the petitioner thereafter on 06.2022 and a reminder was sent on 22.08.2022. As the petitioner did not file a reply, an order came to be passed on 29.08.2022 without providing an opportunity of hearing in terms of the mandate of Section 75(4) of the GST Act. The petitioner preferred an appeal against the said order, which was dismissed on the ground of being beyond the prescribed period of limitation.
5. Contention of learned counsel for the petitioner is that the petitioner has challenged both the orders i.e. the order passed under Section 73(9) of GST Act as well as the order-in-appeal, however, he lays emphasis in challenging the original order whereby the demand under Section 73(9) of GST Act was confirmed, however, without providing for an opportunity of hearing.
6. From the records as produced by learned Standing Counsel, in the notice issued under Section 73 of GST Act, the date by which the reply was to be submitted was mentioned as 07.2022, however, date of personal hearing, time of personal hearing and venue of personal hearing were not indicated and simply the word “NA” was transcribed. Even in the reminder notice sent to the petitioner, in the coloumn of date of personal hearing, time of personal hearing and venue of personal hearing, “NA” was transcribed.
7. Learned Standing Counsel, based upon instructions, states that no personal hearing was granted, which is also evident from the order impugned.
8. Section 75(4) of the GST Act mandates the granting of an opportunity of hearing where an adverse decision is contemplated against a This provision was also interpreted by this Court in the case of Party Time Hospitality Prop. Smt. Punita Gupta Lko. v. State Of U.P. & 2 Others (Writ Tax No.176 of 2023) decided on 28.08.2023 and the Court was of the view that compliance of Section 75(4) of GST Act is mandatory; while doing so, this Court had also considered the earlier judgments of this Court.
9. Considering the fact that the original order is contrary to the mandate of Section 75(4) of GST Act and is also violative of principles of natural justice, the order dated 29.08.2022 is liable to be quashed and is accordingly quashed.
10. As the impugned order has been quashed, order dated 09.2023 is also quashed.
11. Matter is remanded to respondent no.3 to pass fresh orders after giving an opportunity of hearing and after permitting the petitioner to file a reply to the show-cause notice, in accordance with law.
12. The petition is allowed in above
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