Facts of the Case

The petitioner, M/S Brijesh Kumar Singh, through its partner Brijesh Kumar Singh, challenged an assessment order dated 26.12.2022 passed by the Deputy Commissioner, State Tax, Sector-1, Raebareli, for the tax period March 2020, raising a demand in excess of Rs.7,81,494/- (the order elsewhere describes the disputed demand at approximately Rs.19 lakhs). The sole ground pressed was that the only notice issued to the petitioner, dated 24.11.2022, itself denied any opportunity of personal hearing — item no.3 of the table appended to the notice marked "NA" against the columns for date, time and venue of personal hearing. The petitioner contended this amounted to a complete denial of the opportunity of oral hearing mandated under Section 75(4) of the U.P. GST Act, 2017, before the Assessing Authority passed its adverse order, and approached the Allahabad High Court, Lucknow Bench.

Issues Involved

  1. Whether an assessment order raising an adverse demand, passed pursuant to a notice that itself marked the personal hearing columns as "NA," complies with the mandatory requirement of Section 75(4) of the UP GST Act.
  2. Whether the obligation to grant a personal hearing under Section 75(4) is contingent on the assessee having specifically requested one.

Petitioner's Arguments

  • Section 75(4) of the UP GST Act, as interpreted by a coordinate bench in Bharat Mint & Allied Chemicals v. Commissioner Commercial Tax, obliges the Assessing Authority to grant a personal hearing before passing any order adverse to the assessee, irrespective of a specific request.
  • The notice itself, by marking "NA" against the date, time and venue for personal hearing, foreclosed any opportunity of oral hearing before an adverse assessment order raising a substantial demand was passed.
  • Reliance was also placed on the Gujarat High Court's decision in M/S Hitech Sweet Water Technologies Pvt. Ltd. v. State of Gujarat in support of the mandatory character of the hearing requirement.

Respondent's Arguments

  • The State's position, as reflected in the record and addressed by the Court, rested on the fact that the assessee had not availed the option for a personal hearing marked in the notice, suggesting no obligation arose since Section 75(4) speaks of a hearing "where a request is received in writing" or where an adverse decision is contemplated.

Court Order/Findings

  • The Division Bench expressed complete agreement with the coordinate bench's view 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 afford one before passing an adverse order.
  • The Court held that the fact the petitioner may have signified "No" in the notice's hearing column bears no legal consequence, since Section 75(4) mandates a hearing wherever an adverse decision is contemplated, and denial of even this minimal opportunity, particularly in a case creating heavy civil liability, violates natural justice.
  • Affording a hearing was seen as important not only to satisfy natural justice but to enable the authority to pass a reasoned order aiding better appreciation at any subsequent appellate stage.
  • The writ petition was allowed; the assessment order dated 26.12.2022 was set aside and the matter remitted to the Deputy Commissioner, State Tax, Sector-1, Raebareli, with a direction to issue a fresh notice within two weeks, the petitioner undertaking to appear on the next date fixed so that proceedings could conclude expeditiously.

Important Clarification

  • Under Section 75(4) of the UP GST Act (and the pari materia CGST/SGST provision), a personal hearing must be granted before any order adverse to the assessee, regardless of whether the assessee formally requested one, if the notice itself contemplates an adverse decision.
  • A notice marking the personal-hearing particulars as "NA" or an assessee's non-response cannot be treated by the department as a waiver of this mandatory safeguard.
  • This principle is broadly applicable to any GST assessee facing an assessment order passed without oral hearing, and can be relied upon to seek remand even where the assessee did not proactively seek a hearing.

Sections Involved

  • Section 75(4), U.P. GST Act, 2017 — mandates an opportunity of personal hearing where a written request is received or an adverse decision is contemplated; the central provision in this case.

Decision – In Favour of

The decision is in favour of the Assessee. The Allahabad High Court, Lucknow Bench, allowed the writ petition, set aside the assessment order for want of a mandatory personal hearing under Section 75(4), and remitted the matter for fresh proceedings.

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. 198 of 2023
  • CNR: Not available on record
  • Coram: Justice Vivek Chaudhary and Justice Manish Kumar
  • Decision Date: 9 October 2023
  • Disposal Nature: Writ petition allowed; assessment order set aside and remitted

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