Case Law Details
Primeone Work Force Pvt. Ltd. Vs Union of India (Allahabad High Court)
1. Introduction: The Allahabad High Court, in response to four writ petitions (pertaining to Financial Years 2019-20, 2020-21, 2021-22, and 2022-23), heard arguments from counsels representing Primeone Work Force Pvt. Ltd., Union of India, and other respondents. The petitions challenged orders and show cause notices issued by respondent no.4, dated 09.10.2023, 12.10.2023, 11.10.2023, and 12.10.2023, as well as show cause notices dated 14.9.2023, 14.9.2023, 9.2023, and 13.9.2023, respectively.
2. Show Cause Notices: The show cause notices required the petitioners to justify why tax and penalties should not be imposed on them. The specified date for response was 22.9.2023, 22.9.2023, 13.10.2023, and 13.10.2023 in the respective writ petitions. The petitioners submitted their replies on 21.9.2023, 21.9.2023, 10.2023, and 07.10.2023. However, an inadvertent error in marking “NO” for the opportunity of hearing raised concerns.
3. Legal Basis – Section 75(4) of U.P. GST Act, 2017: The counsel for the petitioners argued that Section 75(4) of the U.P. GST Act, 2017, mandates an opportunity of hearing when an adverse decision is contemplated. Highlighting the significance of this provision, the counsel pointed out that the orders were issued a day before the scheduled hearing date, depriving the petitioners of their right to present their case. Reference was made to a relevant judgment in Writ Tax No.551 of 2023 “M/s. Mohini Traders vs. State of U.P. and another,” reinforcing the need for a fair hearing.
4. Court’s Observations and Decision: The Court observed that Section 75(4) explicitly requires an opportunity of hearing when an adverse decision is anticipated. Considering that both tax and penalties were imposed, and an adverse decision was contemplated, the Court held that the department was obligated to provide a hearing. The Court referred to its previous decision in M/s. Mohini Traders (supra), supporting the petitioner’s stance.
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