Facts of the Case

Heard together with a companion matter concerning the same trader, M/S Mohini Traders challenged a further UP GST assessment order raising a substantial demand for the tax period April 2018. As in the companion case, the only notice issued to the petitioner marked the columns for date, time and venue of personal hearing as "NA," meaning the Assessing Authority had pre-emptively decided not to offer an oral hearing before passing an adverse order. The petitioner's reply had been entertained shortly before the order was passed.

Issues Involved

  1. Whether the assessment order was sustainable where the preceding notice marked the personal-hearing columns as "NA", following the same reasoning applicable to the petitioner's companion writ petition (Writ Tax No.550 of 2023) decided the same day.

Petitioner's Arguments

  • Relying on Bharat Mint & Allied Chemicals v. Commissioner, Commercial Tax, it was argued that Section 75(4) of the U.P. GST Act obliges the Assessing Authority to grant a personal hearing before passing any adverse order, irrespective of the assessee's own tick-mark choice on the reply form.
  • The disputed demand was substantial and wholly adverse, making the denial of hearing fatal to the order.
  • Reliance was also placed on the Gujarat High Court's ruling in M/S Hitech Sweet Water Technologies Pvt. Ltd. v. State of Gujarat.

Respondent's Arguments

  • The petitioner had tick-marked "No" against the option for personal hearing in its online reply to the show-cause notice, and having thereby declined the opportunity of hearing, could not later complain of any error in the consequent order.

Court Order / Findings

  • Following the same reasoning as in the companion matter decided the same day, the Court reiterated that Section 75(4) casts a mandatory duty on the Assessing Authority to afford a hearing wherever an adverse decision is contemplated, and that an assessee's tick-mark declining personal hearing carries no legal consequence once that threshold is met.
  • Given the scale of the civil liability involved, minimal opportunity of hearing was found essential to ensure a reasoned order and better appreciation of the matter at any subsequent appellate stage.
  • The impugned assessment order was set aside and the matter remitted to the Assistant Commissioner, State Tax, Sector-6, Aligarh, to issue a fresh notice within two weeks, with the petitioner undertaking to appear promptly so proceedings conclude expeditiously.
  • The writ petition was allowed.

Important Clarification

Where the Allahabad High Court quashes one assessment order against a trader for denial of the Section 75(4) personal hearing on account of a notice marking the hearing columns "NA", it will apply the identical reasoning to any companion order against the same or a similarly placed assessee raised on the same defective notice format, reinforcing that this is a systemic drafting defect in the notice template rather than a one-off lapse.

Sections Involved

  • Section 75(4), U.P. GST Act, 2017 – mandates an opportunity of hearing where written request is made or an adverse decision is contemplated against the person.

Decision – In Favour of

In favour of the Assessee — the assessment order was set aside for denial of the mandatory personal hearing, with the matter remitted for a fresh assessment after hearing, leaving the underlying tax demand open.

Case Details

High Court of Judicature at Allahabad (Chief Justice's Court); Writ Tax No.551 of 2023; Coram: Hon'ble Pritinker Diwaker, Chief Justice, and Hon'ble Saumitra Dayal Singh, J.; Order dated 03.05.2023; CNR not indicated on the order copy.

Link to Download the Order

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