Merino Industries Ltd. Vs State of Uttar Pradesh and another (Allahabad High Court)
Allahabad High Court Reiterates Mandatory Personal Hearing Under GST Law; Imposes exemplary Cost on Tax Officer for Violation
It is common knowledge that Income Tax & GST officials do not provide personal hearing before imposing additional taxes and specially penalties, inspite of specific requests by the assessees. Such an action of the Tax Authorities is violative of the principles of Natural Justice and is liable to be quashed by the Courts.
In a significant ruling reinforcing the principles of natural justice in taxation matters, the Allahabad High Court in the case of Merino Industries Ltd. vs. State of U.P. in Writ Tax no. 1406 of 2025 vide judgment dated 02 April 2025 has set aside a GST adjudication order passed without granting a personal hearing to the assessee, despite a specific request. The Court not only quashed the impugned order but also imposed an exemplary cost of ₹20,000 on the erring officer and also directed the State to ensure proper training of Tax Officials.
The brief facts of the case are that the petitioner, Merino Industries Ltd., engaged in manufacturing and supplying potato flakes, had challenged an order dated 04.02.2025 passed by the Joint Commissioner, SGST, Corporate Circle-1, Ghaziabad under Section 74 of the CGST/UPGST Act, 2017. The order raised a demand of over ₹5.82 crore following a classification dispute concerning the applicable tariff heading for potato flakes.
