S.75(4) UPGST Act | Failure To File Reply To Show-Cause Notice Does Not Take Away Right Of Personal Hearing: Allahabad High Court

The Allahabad High Court has held that not filing a reply to a show cause notice does not take away the opportunity for personal hearing mandated under Section 75(4) of the Uttar Pradesh Goods and Service Tax Act, 2017.

Section 75(4) of the UPGST Act provides that an opportunity for a hearing must be granted if requested in writing or where any adverse action is contemplated against such person.

The bench comprising of Justice Saumitra Dayal Singh and Justice Manjive Shukla held that there is a dual requirement engrained in the principles of natural justice.

“First with respect to submission of written reply and the second with respect to oral hearing. Failure to avail one opportunity may not lead to denial of the other. The two tests have to be satisfied independently.”

Petitioner was issued a show cause notice under Section 73 of the UPGST Act which only provided for an opportunity to file a reply. Under the column for "date of personal hearing", Not Applicable was mentioned.

The Court observed that the petitioner was not granted an opportunity for personal hearing. The Court held that not filing a reply as contemplated in the show cause notice will only lead to the closure of the opportunity of filing a reply, but it cannot take away the right of personal hearing mandated by Section 75(4) of the UPGST Act.

“Thus, upon service of notice the petitioner had been called to file its reply only. Non compliance of that show cause notice may have only led to closure of opportunity to submit written reply. However by virtue of the express provision of Section 75 of the Act, even in that situation the petitioner did not lose its right to participate in the oral hearing and establish at that stage itself that the adverse conclusions proposed to be drawn against the petitioner, may be dropped.”

The Court held the order impugned was contrary to the mandatory procedure and, accordingly, set it aside. The petitioner was granted an opportunity to file a reply and appear in person before the assessing authority.

Case Title: Ms Atlas Cycles Haryana Ltd v. State of U.P. and Another 2024 LiveLaw (AB) 95 [WRIT TAX No. - 144 of 2024]

Case citation: 2024 LiveLaw (AB) 95

Counsel for Petitioner: Shubham Agrawal

Counsel for Respondent: Ankur Agrawal

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