Uttar
Pradesh Goods and Services Tax Act, 2017, Section 75
Constitution
of India, 1950, Article 226
Determination
of tax--Opportunity of personal hearing not provided to assessee--Validity
of
Conclusion: Where
assessment order was passed without providing opportunity of personal hearing
to the assessee, the said order was liable to set aside.
Department passed
assessment order against assessee without providing it an opportunity of
personal hearing. The
assessee contended that such action resulted in violation of principles of
natural justice. Held: Affording opportunity of personal hearing
is mandatory particularly where order is passed against assessee. In instant
case, order was passed without affording an opportunity of personal hearing to
the assessee in terms of section 75(4) of the UPGST Act, the said order was
liable to set aside.
Decision: In
favour of assessee
Relied: Shree Sai
Palace v. State of U.P. & Anr. (Writ Tax No. 50 of 2023, dt.
21-02-2024) : 2024 TaxPub(GST) 625 (All-HC), Bharat Mint and Allied Chemicals
v. Commissioner Commercial Tax & Ors. 2022 SCC OnLine All 1088 : 2022
TaxPub(GST) 0400 (All-HC) and Primeone Work Force Pvt. Ltd. v. Union of
India 2024 :AHCLKO: 3533-DB : 2024 TaxPub(GST) 93 (All-HC)
IN THE ALLAHABAD HIGH COURT
SHEKHAR B. SARAF, J.
Meera Glass Industries v. State of UP & Ors.
Writ Tax No. 461 of 2024
3 April, 2024
Petitioner by: Vishwjit
Respondent by: C.S.C.
Shekhar B. Saraf, J.
Heard Sri Vishwjit, counsel for the petitioner and the
learned Standing Counsel for the State.
2. This is a writ petition
under article 226 of the Constitution of India wherein the petitioner is
aggrieved by the order dated 12-7-2023 passed by the Additional Commissioner,
Grade 2, (Appeal), Judicial Division, State Tax, Mainpuri (hereinafter referred
to as the 'Respondent No. 2') for the tax period of April, 2021.
3. Upon perusal of the
record and after hearing of the counsel for the parties, it is clear that an
opportunity of 'personal hearing' was not afforded to the petitioner which is a
mandatory requirement under section 75(4) of the Uttar Pradesh Goods and Services
Tax, Act, 2017 (hereinafter referred to as the "Act").
4. The significance of the
word "or'' in section 75(4) of the UPGST Act, 2017 cannot be
underestimated. The usage of the word "or'' extends beyond its disjunctive
function; it serves as a pivotal indicator of legislative intent regarding the
necessity of providing an opportunity for personal hearing. By incorporating
"or'' into the statutory language, lawmakers explicitly delineate two
distinct scenarios in which the opportunity of personal hearing must be
afforded: either upon application by the individual subject to penalty or tax
imposition, or in the event of contemplation of an adverse order. Personal
hearing represents a fundamental aspect of procedural fairness and natural
justice, ensuring that individuals have the opportunity to present their case,
respond to allegations, and address any concerns or mitigating factors directly
to the decision-maker. It is a vital safeguard against arbitrary or unjust
decisions. The inclusion of "or'' in section 75(4) of the UPGST Act, 2017,
emphasizes the dual nature of the obligation to provide a personal hearing,
accommodating both proactive requests from individuals seeking to defend their
interests and reactive responses to adverse orders contemplated by tax
authorities. In either scenario, the statutory mandate remains clear: the
individual must be afforded an opportunity for personal hearing before any
final determination is made regarding tax or penalty imposition. Moreover, the
statutory mandate for personal hearing reflects an acknowledgement of the
complex and multifaceted nature of tax and penalty determinations, which often
involve intricate legal and factual considerations. Personal hearing provides a
forum for nuanced discussion and exploration of these complexities, enabling
decision-makers to make well-informed and equitable decisions based on a
comprehensive understanding of the circumstances at hand.
5. This Court in M/s
Shree Sai Palace v. State of U.P. and Another (Writ Tax No.50 of
2023 decided on 21-2-2024 : 2024 TaxPub(GST) 625 (All-HC), Neutral Citation
No.2024:AHC:29522), relying on two judgments of coordinate Bench of this
Court in Bharat Mint and Allied Chemicals v. Commissioner Commercial
Tax and Others reported in 2022 SCC OnLine All 1088 : 2022
TaxPub(GST) 0400 (All-HC) and M/s Primeone Work Force Pvt. Ltd. v.
Union of India, reported in 2024:AHCLKO: 3533-DB : 2024 TaxPub(GST)
93 (All-HC), in similar facts and circumstances has held that no
orders can be allowed to pass through the legislative barriers of natural
justice erected to safeguard individual rights and prevent abuse of power and
that the opportunity of hearing is required to be afforded to the petitioner
before passing orders.
6. In light of the above,
let there be a writ of certiorari issued against the order dated 12-7-2023 and
the order dated 18-8-2022. These orders are quashed and set aside.
Consequential relief to follow. The respondent No. 3 is directed to grant an
opportunity of personal hearing to the petitioner and thereafter pass a
reasoned order in accordance with the law within a period of six weeks from
date.
7. This writ petition is,
accordingly, allowed.