UP GST Act | Personal Hearing Mandatory Before Passing Adverse Orders: Allahabad High Court
The Allahabad High Court has held that it is mandatory for the Assessing Authority to provide an opportunity of personal hearing to the Assesee before any adverse order is passed against him. The bench comprising of Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava held that “not only such opportunity would ensure observance of rules of natural of justice but it would allow...
The Allahabad High Court has held that it is mandatory for the Assessing Authority to provide an opportunity of personal hearing to the Assesee before any adverse order is passed against him.
The bench comprising of Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava held that “not only such opportunity would ensure observance of rules of natural of justice but it would allow the authority to pass appropriate and reasoned order as may serve the interest of justice and allow a better appreciation to arise at the next/appeal stage, if required.”
For the tax period July 2017 to March 2018, the Deputy Commissioner, State Tax, Sector-1, Karvi raised a demand in excess to Rs. 26 Lacs. The petitioner challenged the demand order on ground that the only 15 days time was given to file a reply. No opportunity of personal hearing was provided to the Petitioner before raising the demand.
Petitioner relied on Section 75(4) of the U.P. GST Act, 2017 which makes it mandatory on the Authority to provide an opportunity for hearing before any adverse order is passed against an assesee. Reliance was placed on the decision of the Allahabad High Court in Bharat Mint & Allied Chemicals v. Commissioner Commercial Tax & 2 Ors.
The Court held Petitioner marking ‘No’ in the column to avail personal hearing, would be of no consequence as it is mandatory upon the authority to provide an opportunity of personal hearing.
“Even otherwise in the context of an assessment order creating heavy civil liability, observing such minimal opportunity of hearing is a must. Principle of natural justice would commend to this Court to bind the authorities to always ensure to provide such opportunity of hearing. It has to be ensured that such opportunity is granted in real terms. Here, we note, the impugned order itself has been passed on 21.03.2023, while reply to the show-cause- notice had been entertained on 30.12.2022. The stand of the assessee may remain unclear unless minimal opportunity of hearing is first granted. Only thereafter, the explanation furnished may be rejected and demand created,” held the Court.
Accordingly, the writ petition was allowed and the case was remitted to Assistant Commissioner, State Tax, Sector-1, Karvi, to issue a fresh notice to the petitioner.
Case Title: M/S B L Pahariya Medical Store v. State of U.P. and Another [Writ Tax No. - 981 of 2023]