M/S Xestion Advisor Private Limited vs. Additional Commissioner Grade Ii And Another

Heard Shri Harsh Vardhan Gupta, learned counsel for the petitioner and learned ACSC for the State - respondents.

Since learned counsel for the parties submit that the issues involved in these writ petitions are similar, therefore, the same are being decided by the common order with the consent of the learned counsel for the parties. Writ Tax No. 1462 of 2024 is taken as a leading case for deciding the controversy involved in these writ petitions. Writ Tax No. 1462 of 2024:

The instant writ petition has been filed against the impugned order dated 12.06.2024 passed by the respondent no. 1 as well as the impugned order dated 18.11.2020 passed by the respondent no. 2. 4. Learned counsel for the petitioner submits that the petitioner is a Company incorporated under the Companies Act, 1956 and engaged in the business of providing management consultancy services. He further submits that on 05.11.2020, a show cause notice was issued in Form DRC - 01 under section 74 of the GST Act for non-compliance in filing Form GSTR - 3B. Thereafter,

Per contra, learned ACSC supports the impugned orders.

After hearing learned counsel for the parties, the Court has perused the record.

It is not in dispute that the notice was issued on 05.11.2020, but the record shows that in the column with regard to date of 3 personal hearing, time of personal hearing and venue of personal hearing, “N.A.” was mentioned. This Court in Bharat Mint & Allied Chemicals Vs. Commissioner Commerical Tax & 2 Ors., (2022) 48 VLJ 325, has held that the Assessing Authority was bound to afford opportunity of personal hearing to the petitioner before passing an adverse assessment order. In absence of opportunity of hearing afforded, the same is contrary to the law declared by this Court in Bharat Mint & Allied Chemicals (supra). Reliance has also been placed on a decision of the Gujarat High Court in M/S Hitech Sweet Water Technologies Pvt. Ltd. Vs. State of Gujarat, 2022 UPTC (Vol. 112) 1760. 9. Further, in Mahendra Educational (P) Limited (supra), the Division Bench of this Court has held as under:-

Solitary ground being pressed in the present petition is, the only notice in the proceedings was issued to the petitioner on 13.04.2021 seeking his reply within 30 days. Referring to item no. 3 of the table appended to that notice, it has been pointed out, the Assessing Authority had at that stage itself chosen to not give any opportunity of hearing to the petitioner by mentioning "NA" against column description "Date of personal hearing". Similar endorsements were made against the columns for "Time of personal hearing" and "Venue where personal hearing will be held". Thus, it is the objection of learned counsel for the petitioner, the petitioner was completely denied opportunity of oral hearing before the Assessing Authority.

Having hearing learned counsel for the parties and having perused the record, Section 75(4) of the Act reads as under : "An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person."

We find ourselves in complete agreement with the view taken by the coordinate bench in Bharat Mint & Allied Chemicals (supra). Once it has been laid down by way of a principle of law that a person/assessee is not required to request for "opportunity of personal hearing" and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order, the fact that the petitioner may have signified 'No' in the column

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 26.07.2021. 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.

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.

In view of the aforesaid facts & circumstances of the case as well as the law laid down by this Court in the cases referred to above, both the writ petitions are allowed. The impugned orders passed in these writ petitions are hereby set aside.

The matter is remitted to the respondent no.2/Deputy Commissioner, State Tax, Sector – 8, Noida, Gautam Buddha Nagar to issue a fresh notice to the petitioner within a period of two weeks from today. The petitioner undertakes to appear before that authority concerned on the next date fixed such that proceedings may be concluded, as expeditiously as possible.

Any amount deposited during the pendency of the proceedings, shall be subject to the outcome of the order passed by the Authority concerned. Order Date :-09/04/2025 Amit Mishra AMIT KUMAR MISHRA High Court of Judicature at Allahabad