Facts of the Case

The petitioner, M/S K.D. Enterprises, filed this writ petition before the Allahabad High Court challenging an assessment order dated 19.04.2023 passed by the Commercial Tax Officer, State Tax Sector-10, Meerut, under Section 73 of the U.P. Goods and Services Tax Act, 2017. The principal challenge was that the petitioner had not been afforded a personal hearing before the order was passed, despite Section 75(4) conferring such a right. A notice issued on 07.10.2022 had fixed 21.10.2022 as the date for personal hearing, but no order was passed on that date. After a gap of nearly six months, a further notice dated 21.03.2023 fixed a fresh timeline (till 05.04.2023) for filing a reply, but did not notify any date for personal hearing; even then, no order was passed on that date, and the impugned assessment order was ultimately passed on 19.04.2023.

Issues Involved

  1. Whether passing an assessment order under Section 73 without notifying a date for personal hearing violates the mandatory requirement of Section 75(4) of the UP GST Act.
  2. Whether such infraction of natural justice warrants quashing of the assessment order and remand for fresh adjudication.

Petitioner's Arguments

  • Despite Section 75(4) conferring a mandatory right to personal hearing, no hearing date was notified in the subsequent notice dated 21.03.2023, and the assessment order dated 19.04.2023 was passed straightaway without granting any such hearing.
  • This procedural lapse amounted to a breach of statutory provisions and principles of natural justice, warranting quashing of the assessment order.

Respondent's Arguments

  • Learned counsel for the revenue could not dispute that the assessee had a statutory right to personal hearing under Section 75(4) of the Act.
  • Could not dispute that, after the notice dated 21.03.2023 granting a fresh timeline to reply, no date for personal hearing was notified before the impugned order dated 19.04.2023 was passed.

Court Order/Findings

  • Non-grant of personal hearing before passing an assessment order, despite the mandatory right conferred under Section 75(4) of the UP GST Act, constitutes infraction of the statutory provisions as well as principles of natural justice.
  • The impugned assessment order dated 19.04.2023 was quashed, and the matter was remitted to the Assessing Officer for passing a fresh order in accordance with law.
  • The writ petition was allowed.

Important Clarification

Under Section 75(4) of the UP GST Act, affording a personal hearing before passing an assessment order under Section 73 is mandatory, not discretionary. A notice that only grants a further opportunity to file a written reply, without fixing a date for personal hearing, followed directly by the final order, breaches the principles of natural justice and renders the order liable to be quashed and remanded — irrespective of whether the assessee formally requested a hearing.

Sections Involved

  • Section 73, UP GST Act, 2017 — governs determination of tax not paid or short paid, or ITC wrongly availed, for reasons other than fraud or wilful misstatement.
  • Section 75(4), UP GST Act, 2017 — mandates an opportunity of personal hearing before passing an adverse order.

Decision – In Favour of

In favour of the Assessee — the assessment order under Section 73 was quashed for denial of the mandatory personal hearing under Section 75(4), and the matter was remitted for fresh adjudication in accordance with law.

Related Case Laws

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

Case Details

  • Court: High Court of Judicature at Allahabad
  • Case No.: Writ Tax No. 1313 of 2023
  • CNR: 2023:AHC:220857-DB
  • Coram: Justice Manoj Kumar Gupta and Justice Donadi Ramesh
  • Decision Date: 21 November 2023
  • Disposal Nature: Allowed; quashed and remitted

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