GST Order Cannot Be Challenged Citing No Personal Hearing If Hearing Not Requested After Receipt Of SCN: MP High Court Dismisses Plea

The Madhya Pradesh High Court at its Indore bench, dismissed a writ petition which was filed by Future Consumer Limited, challenging an order passed by the Deputy Commissioner of State Tax under Section 73 of GST Act. The petitioner stated that they were denied the right to personal hearing under Section 75(4) of the Act.

The division bench comprising of Justice Vivek Rusia and Justice Binod Kumar Dwivedi discussed on the petitioner's claim regarding fulfilment of procedural requirement for requesting a personal hearing.

“The petitioner did not prefer any appeal within the period of limitation and directly approached this Court by way of writ petition solely on the ground that the opportunity of personal hearing as contemplated under Section 75(4) of GST Act has not been afforded to him, therefore, the order is unsustainable in law.”

The Court determined that Future Consumer Limited did not appear before the tax authority and provided no written reply or request for a personal hearing in response to the show-cause notice issued under Section 73(1).

The court stated that “Sub-section (4) of Section 75 of GST Act says that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with the tax or penalty or any adverse decision is contemplated against such person. The Division Bench of this Court has held that the opportunity of hearing means persons opportunity of hearing and if such personal opportunity of hearing is not provided then the order is unsustainable and liable to be set aside”.

The Court stated that the case cited by the petitioners, i.e., M/s Technosys Security System Pvt. Ltd. v. Commissioner of Commercial Taxes is different and in that case, the petitioner had filed a reply but was not given a chance for a personal hearing. In this case, the petitioner did not respond to the show-cause notice or attend the scheduled hearing before the Deputy Commissioner. The court stated that personal hearings must be requested in writing as given under Section 75(4) of the GST Act or at least verbally if the party is present.

“When the person after receipt of the show-cause notice choose not to appear before the authority to file a reply or to make a request for personal hearing, then after passing the final order, he cannot allege that an opportunity of hearing has been denied to him, therefore, the case of the petitioner is distinguishable from the case of M/s Technosys Security System Pvt. Ltd.”

The present case is regarding the imposing of tax liabilities of Rs. 86,73,188 and interest and penalties of Rs. 1,16,65,438. The petitioner stated that the order is unjust as it denied the right of personal hearing, which is provided under Section 75(4). The petitioner had cited the M/s Technosys Security System Pvt. Ltd. case in which it was held that a personal hearing must be granted if requested, even if it is not explicitly sought in writing. The petitioner contended that they were entitled to an identical remedy because the circumstances were similar.

The court stated that no reply was filed by the Petitioner or an attempt made any request for a hearing, therefore they cannot claim that they were denied the opportunity of hearing. The petition was dismissed and the court directed that the petitioner had the right to file an appeal before the appellate authority along with requesting for a condonation of delay.

“The petitioner, if so advised, may file an appeal on merit before the Appellate Authority along with an application for condonation of delay.”

Case Title: M/S Future Consumer Limited Versus The State Of Madhya Pradesh And Others

Case No: WP-29375-2024

Citation: 2024 LiveLaw (MP) 277

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