M/S Ganesh Plywood Industries Thru. Authorised Representative Sri Ramesh Kumar Agarwal vs. Addl. Commissioner Grade-2 (Appeal) State Tax Sitapur And Another

Facts

The petitioner, M/S Ganesh Plywood Industries, challenged an order dated 13.07.2023 passed under Section 74 of the CGST Act and a subsequent order dated 14.05.2025 that dismissed their appeal as being time-barred. The petitioner's primary contention was that they were not granted an opportunity of hearing before the initial order under Section 74 was passed. The revenue, represented by the Standing Counsel, argued that since the petitioner had opted for 'no hearing' in their reply, a hearing was not provided. The High Court considered this issue in light of its previous judgment in Bharat Mint and Allied Chemicals vs Commissioner Commercial Tax and others.

Held

The High Court quashed both the order dated 13.07.2023 passed under Section 74 of the CGST Act and the order dated 14.05.2025 dismissing the appeal. The Court followed its earlier judgment in the case of Bharat Mint and Allied Chemicals vs Commissioner Commercial Tax and others. The reasoning was that the petitioner was entitled to an opportunity of hearing before an adverse order was passed, and the revenue's contention that the petitioner opted for 'no hearing' was insufficient to deny this fundamental right. The Court found that the principles of natural justice were violated. The matter was remanded back to the assessing authority to pass a fresh order in accordance with law, after providing the petitioner with an opportunity of hearing. No specific amount in dispute was mentioned.

Key Issues

1. Whether the order dated 13.07.2023 passed under Section 74 of the CGST Act is vitiated for want of an opportunity of hearing to the petitioner, contrary to principles of natural justice? 2. Whether the appellate authority erred in dismissing the appeal as time-barred without considering the merits, given the alleged lack of opportunity of hearing in the original proceeding? Petitioner's Contention: The petitioner argued that no opportunity of hearing was granted prior to the passing of the order under Section 74 of the CGST Act, which violates principles of natural justice. Revenue's Contention: The Standing Counsel for the revenue stated that as the petitioner had opted for 'no hearing' in their reply, a hearing was not accorded. The revenue relied on the instructions received.