Summary: In the case of M/s. Eveready Industries India Limited v. State of UP, the Allahabad High Court addressed the requirement of personal hearings under Section 75(4) of the Central Goods and Services Tax Act (CGST Act). The petitioner challenged an order and a Show Cause Notice, arguing that their request for a personal hearing was ignored, violating principles of natural justice. The Court held that the omission of the word “personal” before “hearing” in Section 75(4) was an error that must be rectified through statutory interpretation, emphasizing that all provisions of a statute should be read cohesively and ambiguities favoring the assessee. The Court concluded that a personal hearing is a mandatory prerequisite before any adverse order is made and set aside the impugned order, directing that the matter be returned to the appropriate officer for a proper hearing. This ruling underscores the importance of adhering to due process in tax-related matters, reaffirming the necessity for personal hearings when requested.
The Hon’ble Allahabad High Court, Lucknow Bench in the case of M/s. Eveready Industries India Limited v. State of UP [Writ Tax No. 114 of 2024 dated May 31, 2024] allowed the writ petition and held that it is mandatory to grant opportunity of personal hearing and stated that the word “personal” is intended to be added before the word hearing in Section 75(4) of the Central Goods and Services Tax Act (“the CGST Act”) which was erroneously left out at the time of drafting.
Facts:
M/s. Eveready Industries India Limited (“the Petitioner”) filed a writ petition against order dated April 27, 2024 (“the Impugned Order”) and Show Cause Notice dated August 07, 2023 passed by the Revenue Department (“the Respondent”) on the ground that despite the mandate of Section 75(4) of the Act which requires providing personal hearing no opportunity of personal hearing was granted, despite the Petitioner specifically asking for personal hearing, thereby the Impugned Order was passed in violation of the settled principles of natural justice.
Issue:
Whether personal hearing is a mandatory under Section 75(4) of the CGST Act before passing of order?
Held:
The Hon’ble Allahabad High Court in the case of Writ Tax No. 114 of 2024 held as under:
- Noted that, the principles of statutory interpretation i.e all sections of the statue need to be read together, no, section in a statute can be rendered otiose (futile, no practical use), any ambiguity in the charging section must be read in favour of the assessee, the Court is empowered to supply causus omissus (addition in particular situation), if the Court believes that legislature intended a particular provision in certain manner but the same was not added during the drafting of the statute; keeping in view the overall scheme of the statute has to be complied with while interpreting the statute.
- Opined that, the word “personal” is intended to be added before the word hearing in Section 75(4) of the CGST Act which was erroneously left out at the time of drafting.
- Held that, the writ petition is allowed and the Impugned Order are set aside
- Directed that, the matters be remanded back to proper officer for granting of opportunity of personal hearing.
Relevant Provision:
Section 75(4) of the CGST Act
“Section 75. General provisions relating to determination of tax.-
(4) 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”
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