Shivtara Settering Services Vs Versus Commissioner (Uttarakhand High Court)
Summary: The Uttarakhand High Court quashed an order dated 17.07.2025 passed by respondent no.3 under Section 74 of the Uttarakhand Goods and Services Tax Act, 2017, imposing total tax liability of Rs.45,64,844/-, including penalty of Rs.22,82,422/-, upon the petitioner firm. The petitioner contended that the order had been passed without granting an opportunity of hearing, contrary to the mandatory requirement under Section 75(4). Its counsel relied on Shivtara Developers v. State of Uttarakhand, Writ Petition (M/B) No.702 of 2026, decided on 09.09.2026, in which an order under Section 74 had been quashed in similar circumstances. The Revenue submitted that no personal hearing had been provided because the petitioner had not opted for one.
The Court rejected that justification, explaining that Section 75(4) requires an opportunity of hearing either when a written request is received from the person chargeable with tax or penalty, or when an adverse decision is contemplated against that person. Accordingly, the obligation to grant a personal hearing arises even where the assessee has not opted for it, if the Department proposes to pass an adverse order. The Court noted that the same view had been taken in the cited Shivtara Developers decision. It consequently quashed the impugned order, leaving the Department free to pass a fresh order after providing an opportunity of hearing to the petitioner firm. Any pending application also stood disposed of.
Cases Discussed
- Shivtara Developers v. State of Uttarakhand, Writ Petition (M/B) No.702 of 2026, decided on 09.09.2026 (Uttarakhand High Court) — The petitioner relied on this decision involving a similar challenge to an order under Section 74. The Court noted that it had taken the same view there: a personal hearing must be afforded when an adverse order is contemplated, even if the assessee has not opted for one.
FULL TEXT OF THE ORDER 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 total tax liability of Rs.45,64,844/- (including penalty of Rs.22,82,422/-) 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, writ petition bearing Shivtara Developers v. State of Uttarakhand [Writ Petition (M/B) No.702 of 2026, dated 9-9-2026], challenging order under Section 74 of the Act, had been allowed 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 Shivtara Developers (supra).
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.
