S.A.B.India Construction Limited Vs State of U.P. (Allahabad High Court)
Summary: The Allahabad High Court set aside the adjudication order dated 12 December 2023 passed against S.A.B.India Construction Limited under Section 73(9) of the Uttar Pradesh Goods and Services Tax Act, 2017, for the tax period 2017–18. The petitioner challenged the order on the ground that the adjudicating authority had fixed the date for personal hearing on the same day as the deadline for submitting its reply, thereby denying a reasonable opportunity to present its case. The petitioner relied on the decision in Mahaveer Trading Company Vs Deputy Commissioner State Tax and Another, Writ Tax No. 303 of 2024.
The High Court observed that the material facts were undisputed and that the principles of natural justice required adequate notice and a meaningful opportunity of hearing before an adverse adjudication order could be passed. It considered that no useful purpose would be served by calling for a counter-affidavit or requiring the petitioner to pursue the statutory appellate remedy. Accordingly, the Court quashed the adjudication order and permitted the petitioner to treat that order as the final notice.
The petitioner was granted three weeks to submit a further reply, including objections concerning jurisdiction and merits. Subject to submission of the reply, the adjudicating authority was directed to provide at least 15 days’ notice of the personal hearing and thereafter pass an appropriate reasoned order. The Court did not determine the underlying tax liability on merits.
Cases Discussed
Mahaveer Trading Company Vs. Deputy Commissioner State Tax and Another (Allahabad High Court); Writ Tax No. 303 of 2024 . Relied upon by the petitioner in support of its challenge to fixing the personal hearing and reply submission on the same date.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Shri Pradeep Agrawal, learned counsel for the petitioner and learned Standing Counsel for the State.
2. Challenge has been raised to the adjudication order dated 12.12.2023 passed under Section 73(9) of the U.P. G.S.T Act, 2017 for the tax period 2017-18.
4. 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.
5. 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.
6. Accordingly, the writ petition stands disposed of with the following directions:-
(i) The order dated 12.12.2023 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.
