Facts of the Case

M/S Brijesh Kumar Singh challenged an order dated 06.12.2022 passed by the Deputy Commissioner, State Tax, Sector-1, Raebareli, raising a GST demand exceeding Rs. 27,23,636 for the tax period 2018-19, with disputed tax of about Rs. 19 lakh. The only notice in the proceedings was issued on 28.09.2022, giving the petitioner 30 days to reply. Against the columns for "Date of personal hearing," "Time of personal hearing," and "Venue where personal hearing will be held," the notice itself recorded "NA," indicating that the Assessing Authority had, at the notice stage, chosen not to grant any opportunity of personal hearing.

Issues Involved

  1. Whether Section 75(4) of the U.P. GST Act, 2017 mandates a personal hearing before passing an adverse assessment order, irrespective of whether the assessee specifically requests one.
  2. Whether marking "NA" against the personal-hearing columns in the show-cause notice itself amounted to a denial of the mandatory opportunity of hearing.

Petitioner's Arguments

  • Relying on Section 75(4) of the U.P. GST Act, 2017 and the coordinate bench ruling in Bharat Mint & Allied Chemicals vs Commissioner Commercial Tax & 2 Ors., the petitioner argued the Assessing Authority was bound to grant a personal hearing before passing an adverse order, regardless of any request.
  • The demand order, raising disputed tax of about Rs. 19 lakh, was wholly adverse and was passed without any hearing, contrary to Bharat Mint & Allied Chemicals and the Gujarat High Court's decision in M/S Hitech Sweet Water Technologies Pvt. Ltd. vs State of Gujarat.

Respondent's Arguments

  • Represented by the learned Standing Counsel for the State; no substantive defence of the absence of a personal hearing is recorded in the judgment.

Court Order-Findings

  • The Court agreed with the coordinate bench in Bharat Mint & Allied Chemicals that an assessee is not required to specifically request a personal hearing, and it remains mandatory for the Assessing Authority to grant one before passing any adverse order; marking "No" or "NA" in the notice's hearing columns carries no legal consequence.
  • Observing minimal opportunity of hearing is a must where an assessment order creates heavy civil liability, in keeping with principles of natural justice.
  • The demand order dated 06.12.2022 was set aside, and the matter was remitted to the Deputy Commissioner, State Tax, Sector-1, Raebareli, with a direction to issue a fresh notice within two weeks; the petitioner undertook to appear on the next date fixed so that proceedings could conclude expeditiously.

Important Clarification

  • Under Section 75(4) of the U.P. GST Act, 2017, the Assessing Authority must grant a personal hearing before passing any order adverse to the assessee, whether or not the assessee has specifically requested one; pre-filling the notice's hearing-related columns as "NA" does not discharge this obligation and renders the resulting order liable to be set aside.

Sections Involved

  • Section 75(4), Uttar Pradesh Goods and Services Tax Act, 2017 - mandates an opportunity of hearing before an adverse decision, whether or not requested by the assessee.

Decision-In Favour of

Assessee. The demand order was set aside and the matter remitted for fresh proceedings with a mandatory personal hearing.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

Court: High Court of Judicature at Allahabad, Lucknow Bench
Case No.: Writ Tax No. 200 of 2023
Coram: Hon'ble Vivek Chaudhary, J. and Hon'ble Manish Kumar, J.
Date of Decision: 09.10.2023

Link to Download the Order

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