Brijesh Kumar Singh Vs State Of U.P. (Allahabad High Court)
Allahabad HC addresses denial of personal hearing in tax assessment. Ruling emphasizes natural justice principles. Brijesh Kumar Singh vs. State of U.P.
Introduction: The Allahabad High Court, in the case of Brijesh Kumar Singh vs State of U.P., addressed the petitioner’s challenge to an adverse assessment order passed by the Deputy Commissioner, State Tax, Sector-1, Raebareli for the tax period 2018-19. The primary contention was the denial of an opportunity of personal hearing to the petitioner during the assessment proceedings.
Detailed Analysis: The petitioner highlighted that the notice issued on 28.09.2022 indicated “NA” against the columns for the date, time, and venue of personal hearing, suggesting a complete denial of oral hearing. Citing Section 75(4) of the U.P. GST Act, the petitioner argued that the Assessing Authority was obligated to provide an opportunity of personal hearing, especially when contemplating an adverse assessment order.
Relying on the interpretation of Section 75(4) in the case of Bharat Mint & Allied Chemicals vs Commissioner Commercial Tax, the petitioner asserted that the absence of a request for personal hearing did not absolve the Assessing Authority of its duty to grant such an opportunity. The court agreed with the precedent, emphasizing that the Assessing Authority must ensure a real and meaningful opportunity for oral hearing, irrespective of the assessee’s initial indication.
The court acknowledged the importance of providing an adequate opportunity, particularly in cases involving substantial civil liabilities. Setting aside the impugned order dated 06.12.2022, the court directed the Deputy Commissioner to issue a fresh notice to the petitioner within two weeks, ensuring a fair opportunity for oral hearing. The petitioner pledged to appear promptly for the proceedings.
Conclusion: The Allahabad High Court’s decision underscores the significance of adherence to principles of natural justice, emphasizing the Assessing Authority’s responsibility to afford a genuine opportunity of personal hearing. The ruling aligns with precedents, ensuring a fair and reasoned assessment process, ultimately promoting justice in taxation matters.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Pranjal Shukla, learned counsel for the petitioner and learned Standing Counsel for State respondents.
2. Challenge has been raised to the order dated 06.12.2022 passed by the Deputy Commissioner, State Tax, Sector-1,Raebareli for the tax period 2018-19, whereby demand in excess to Rs.27,23,636/- has been raised against the present petitioner.
3. Solitary ground being pressed in the present petition is, the only notice in the proceedings was issued to the petitioner on 28.09.2022 seeking his reply within 30 days. Referring to item no. 3 of the table appended to that notice, it has been pointed out, the Assessing Authority had at that stage itself chosen to not give any opportunity of hearing to the petitioner by mentioning “NA” against column description “Date of personal hearing”. Similar endorsements were made against the columns for “Time of personal hearing” and “Venue where personal hearing will be held”. Thus, it is the objection of learned counsel for the petitioner, the petitioner was completely denied opportunity of oral hearing before the Assessing Authority.
4. Relying on Section 75(4) of the U.P. GST Act, 2017 (hereinafter referred to as the ‘Act’) as interpreted by a coordinate bench of this Court in Bharat Mint & Allied Chemicals Vs. Commissioner Commerical Tax & 2 Ors., (2022) 48 VLJ 325, it has been then asserted, the Assessing Authority was bound to afford opportunity of personal hearing to the petitioner before he may have passed an adverse assessment order. Insofar as the assessment order has raised disputed demand of tax about Rs.19 lacs, the same is wholly adverse to the petitioner. In absence of opportunity of hearing afforded, the same is contrary to the law declared by this Court in Bharat Mint & Allied Chemicals (supra). Reliance has also been placed on a decision of the Gujarat High Court in M/S Hitech Sweet Water Technologies Pvt. Ltd. Vs. State of Gujarat, 2022 UPTC (Vol. 112) 1760.
5. Having hearing learned counsel for the parties and having perused the record, Section 75(4) of the Act reads as under :
“An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.”
6. We find ourselves in complete agreement with the view taken by the coordinate bench in Bharat Mint & Allied Chemicals (supra). Once it has been laid down by way of a principle of law that a person/assessee is not required to request for “opportunity of personal hearing” and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order, the fact that the petitioner may have signified ‘No’ in the column meant to mark the assessee’s choice to avail personal hearing, would bear no legal consequence.
7. Even otherwise in the context of an assessment order creating heavy civil liability, observing such minimal opportunity of hearing is a must. Principle of natural justice would commend to this Court to bind the authorities to always ensure to provide such opportunity of hearing. It has to be ensured that such opportunity is granted in real terms. Here, we note, the impugned order itself has been passed on 06.12.2022. The stand of the assessee may remain unclear unless minimal opportunity of hearing is first granted. Only thereafter, the explanation furnished may be rejected and demand created.
8. Not only such opportunity would ensure observance of rules of natural of justice but it would allow the authority to pass appropriate and reasoned order as may serve the interest of justice and allow a better appreciation to arise at the next/appeal stage, if required.
9. Accordingly, the present writ petition is allowed. The impugned order dated 06.12.2022 is set aside. The matter is remitted to the respondent no.2/Deputy Commissioner, State Tax, Sector-1, Raebareli to issue a fresh notice to the petitioner within a period of two weeks from today. The petitioner undertakes to appear before that authority on the next date fixed such that proceedings may be concluded, as expeditiously as possible.
