Allahabad HC Sets Aside GST Order as Personal Hearing & Reply Date Were Same

Ambika Kids Wear Vs State of U.P. (Allahabad High Court)

The Allahabad High Court set aside an adjudication order dated 09.07.2024 passed under Section 73(9) of the U.P. GST Act, 2017 for the tax period 2019-20, holding that the principles of natural justice had been violated. The petitioner contended that the date fixed for filing the reply and the date fixed for personal hearing were the same, depriving it of a reasonable opportunity to present its case. Reliance was placed on the decision in Mahaveer Trading Company Vs. Deputy Commissioner State Tax and Another.

The Court noted that these facts were undisputed and observed that unless a taxpayer is given adequate notice of the proposed demand and sufficient opportunity to respond, the resulting adjudication order remains procedurally defective. Consequently, the Court set aside the impugned order and directed that it be treated as the final notice. The petitioner was permitted to file a further reply within three weeks and raise all jurisdictional and merit-related issues.

The adjudicating authority was directed to fix a fresh date for personal hearing by giving at least 15 days’ notice, after which a reasoned order should be passed. The petitioner also undertook to appear on the dates fixed for hearing.

FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT

1. Heard Shri Paritosh Shukla, learned counsel for the petitioner and Shri Sanjay Sarin, learned Additional Chief Standing Counsel for the State-respondents.

2. Challenge has been raised to the adjudication order dated 09.07.2024 passed under Section 73(9) of the U.P. G.S.T Act, 2017 for the tax period 2019-20.

3. It has been submitted, the essential requirements of rules of natural justice have been violated inasmuch as the petitioner was not given reasonable opportunity of personal hearing. The date fixed for personal hearing was the same as the date fixed for filing of reply. In that regard reliance has been placed on Writ Tax No.303 of 2024, Mahaveer Trading Company Vs. Deputy Commissioner State Tax and Another.

4. The above facts are not in dispute. Therefore, no useful purpose may be served either in keeping the present petition or calling for a counter affidavit or relegating the petitioner to the forum of appeal. The rules of natural justice are far too well established to allow any exception to be made in that regard. Unless, the petitioner had been put to notice with respect to the demand proposed to be created by the adjudication order and unless he had been given adequate opportunity to present his case, the order that may arise may remain procedurally defective.

5. Accordingly, the writ petition stands disposed of with the following directions:-

i. The order dated 09.07.2024 is set aside.

ii. The petitioner may treat the impugned order as the final notice.

iii. It may submit its further reply thereto within a period of three weeks. In that regard, it may remain open to the petitioner to raise all jurisdictional and merit issues. Subject to such compliance made, the adjudicating authority may fix a date for personal hearing with at least 15 days notice to allow the petitioner to be prepared on all counts. The petitioner undertakes to appear before the adjudicating authority on the dates that may be fixed. Accordingly, appropriate reasoned order may be passed thereafter.