Shivtara Developers Vs State of Uttarakhand & Others (Uttarakhand High Court)
Summary: The Uttarakhand High Court quashed an order dated 17.07.2025 passed under Section 74 of the Uttarakhand Goods and Services Tax Act, 2017, imposing tax liability of Rs.12,93,408/-, interest of Rs.2,88,943.80/- and penalty of Rs.12,93,408/- upon M/s Shivtara Developers. The petitioner challenged the order principally on the ground that it had been passed without providing any opportunity of personal hearing, contrary to the mandatory requirement contained in Section 75(4) of the GST Act.
The petitioner submitted that in similar facts and circumstances its earlier Writ Petition (M/B) No.702 of 2026, M/s Shivtara Developers vs. State of Uttarakhand & others, challenging another order under Section 74 for a different financial year, had already been decided and the impugned order therein had been quashed. The Revenue sought to justify denial of hearing on the ground that the petitioner had not opted for a personal hearing.
The Division Bench rejected the Revenue’s stand by applying the express language of Section 75(4). The provision requires an opportunity of hearing 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. Thus, the two circumstances operate independently. An assessee’s failure to opt for a personal hearing does not dispense with the statutory obligation to provide one when the authority proposes to pass an adverse order.
The High Court observed that it had repeatedly held, as had various other High Courts, that even where an assessee had not opted for personal hearing, the Revenue is obligated to afford such hearing before passing an adverse order. The same view had also been taken while deciding the petitioner’s previous writ petition, Writ Petition (M/B) No.702 of 2026.
Accordingly, the Court quashed the impugned order dated 17.07.2025. It nevertheless granted liberty to the Department to pass a fresh order after providing an opportunity of hearing to the petitioner firm. The pending application, if any, was also disposed of.
FULL TEXT OF THE JUDGMENT OF UTTARAKHAND HIGH COURT
1. The present writ petition is directed against the order dated 17.07.2025, passed by respondent no.3 under Section 74 of the Uttarakhand Goods and Services Tax Act, 2017, whereby tax liability of Rs.12,93,408/- along with interest of Rs.2,88,943.80/- and penalty of Rs.12,93,408/-, has been imposed upon the petitioner firm.
2. The contention of learned counsel for the petitioner firm is that the Department has passed the impugned order without providing any opportunity of hearing to the petitioner firm, which is a mandatory requirement under Section 75(4) of the Act. He further submits that in similar facts and circumstances, the writ petition filed by the petitioner firm bearing Writ Petition (M/B) No.702 of 2026, “M/s Shivtara Developers vs. State of Uttarakhand & others”, challenging another order under Section 74 of the Act in respect of a different financial year, has already been decided and the impugned order therein has been quashed.
3. Ms. Puja Banga, learned Standing Counsel for the Revenue, however, submits that the petitioner firm had not opted for personal hearing and, therefore, it was not provided to the petitioner firm.
4. Section 75(4) of the Act reads as follows:-
“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.”
5. It has been repeatedly held by this Court and by various other High Courts that even if the assessee had not opted for personal hearing, in case, the revenue proposes to pass an adverse order, it is obligatory on its part to afford personal hearing to the assessee. The same view was taken by this Court while deciding the previous writ petition of the petitioner bearing Writ Petition (M/B) No.702 of 2026.
6. In view of the above, the impugned order is, hereby, quashed. It shall be open to the Department to pass a fresh order after providing opportunity of hearing to the petitioner firm.
7. Pending application, if any, also stands disposed of.
