M/S Vishal Battery Store College Road Sadar Maharajganj Up vs. Union Of INDIA And Another

Facts

The petitioner, M/s Vishal Battery Store, filed a writ petition challenging an order dated 15.4.2024 passed by respondent no.2 under Section 73(9) of the Central Goods and Services Tax Act, 2017. The petitioner argued that the order was passed in violation of principles of natural justice. The Court noted that the factual matrix was similar to a previous judgment by a coordinate bench in Mahaveer Trading Company vs. Deputy Commissioner State Tax. In that case, the Court had highlighted issues with personal hearing dates being incorrectly recorded or prior to the reply submission date, and orders being passed without proper adherence to the hearing schedule. The Court in the present case found no reason to deviate from its previous stance.

Held

The Court held that the impugned order dated 15.4.2024 could not be sustained in the eyes of law as it was passed in gross violation of the fundamental principles of natural justice. The Court relied on the precedent set in Mahaveer Trading Company vs. Deputy Commissioner State Tax, which highlighted procedural irregularities in personal hearings, such as incorrect dates or orders being passed without proper adherence to the hearing schedule. The Court found the present case to be factually similar and saw no reason to take a different stand. The ratio decidendi is that an adjudicating authority must provide a proper opportunity of personal hearing before passing an adverse order, and failure to do so vitiates the entire proceeding. The Court quashed and set aside the impugned order and directed the concerned officer to grant the petitioner another opportunity to file a fresh reply, fix a date for hearing, and pass a reasoned order within two months. The Court also clarified that no adjournment would be granted on the next hearing date.

Key Issues

1. Whether the order dated 15.4.2024 passed by respondent no.2 under Section 73(9) of the CGST Act is sustainable in law, considering alleged violations of natural justice principles, specifically regarding the opportunity of personal hearing? The petitioner contended that the impugned order was passed in gross violation of the fundamental principles of natural justice, as they were not afforded a proper opportunity of personal hearing. The petitioner relied on the principles laid down in the coordinate bench judgment of Mahaveer Trading Company vs. Deputy Commissioner State Tax, which emphasized the necessity of a proper personal hearing before passing an adverse order in adjudication proceedings. The respondent revenue authorities did not record any specific arguments against the petitioner's contention regarding the violation of natural justice. However, they requested a date for further proceedings before the respondent no.2.