Facts of the Case

The petitioner, M/S Panther Security Guard Services, through its Proprietor Chandra Shekhar Singh, challenged an order dated 03.11.2022 confirming a demand under Section 74 of the GST Act, and a further order dated 10.07.2023 dismissing the petitioner's appeal as time-barred. Records produced pursuant to a court direction showed that while the first reminder to the show cause notice fixed a specific date, time and venue for personal hearing, a second reminder — issued after the petitioner sought an adjournment — marked these columns as "NA". The petitioner filed a detailed reply denying the allegations, but the adjudicating authority confirmed the demand without granting any opportunity of hearing, and the subsequent appeal was rejected solely on limitation.

Issues Involved

  1. Whether the assessment order under Section 74 of the GST Act was vitiated for want of an opportunity of personal hearing as mandated by Section 75(4), notwithstanding that the appeal against it was independently dismissed as time-barred.

Petitioner's Arguments

  • Since the adjudication order had not merged into the appellate order — the appeal having been dismissed purely on limitation without going into merits — the writ court could examine the original assessment order directly.
  • No opportunity of hearing was granted, nor any date fixed for hearing, in clear violation of the mandate of Section 75(4) of the GST Act.
  • Reliance was placed on Bharat Mint and Allied Chemicals v. Commissioner of Commercial Tax and M/s Santosh Traders v. State of U.P. (Writ Tax No.174 of 2023, decided 28.08.2023), where the same Court had quashed assessment orders solely for want of a Section 75(4) hearing.

Respondent's Arguments

  • The record was produced pursuant to the Court's earlier direction dated 04.10.2023 for verification of the hearing-related entries in the notices and reminders issued to the petitioner.

Court Order / Findings

  • On perusal of the record, although the reply filed by the petitioner was noted in the adjudication order, no opportunity of hearing was in fact granted, as the second reminder had marked the hearing columns "NA".
  • Following its own precedents in Bharat Mint & Allied Chemicals and M/s Santosh Traders, where assessment orders were quashed solely for want of a Section 75(4) hearing, the Court held the present case was squarely covered and the writ petition deserved to be allowed.
  • Both the assessment order dated 03.11.2022 and the appellate rejection dated 10.07.2023 were quashed, and the matter remanded to the adjudicating authority to pass a fresh order after granting an opportunity of hearing in accordance with law.
  • The original records were directed to be returned to the Standing Counsel.

Important Clarification

Where an assessee's appeal is dismissed purely on the ground of limitation without any consideration of merits, the appellate order does not "merge" with the original assessment order for the purpose of a subsequent writ challenge — the writ court remains free to examine the original order independently on natural-justice grounds such as denial of a Section 75(4) personal hearing, even though the statutory appeal failed on a purely procedural bar.

Sections Involved

  • Section 74, GST Act, 2017 – demand of tax not paid by reason of fraud, wilful misstatement or suppression of facts.
  • Section 75(4), GST Act, 2017 – mandates a personal hearing wherever an adverse decision is contemplated against the assessee.

Decision – In Favour of

In favour of the Assessee — the assessment order and the time-bar appellate rejection were both quashed for denial of a mandatory hearing, with the matter remanded for a fresh order on merits after hearing.

Case Details

Allahabad High Court, Lucknow Bench; Writ Tax No.194 of 2023; Coram: Hon'ble Mr. Justice Pankaj Bhatia; Order dated 12.10.2023; Neutral Citation: 2023:AHC-LKO:66333.

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