Hasimkhan Liyakatkhan Pathan vs. State Of Gujarat

Held

The Court held that the impugned order dated May 22, 2020, passed under Section 74 of the Goods and Services Tax Act, 2017, is quashed and set aside. The matter is remitted to the respondent No. 2 for giving an opportunity of hearing to the writ applicant. The Court noted that the impugned order was passed without providing the writ applicant an opportunity of hearing, especially during the complete lockdown period. The Department agreed to recall the order and pass a fresh one after providing a hearing. The Court directed that the respondent No. 2 shall issue a notice after eight weeks from the date of the order, intimating the date of hearing to the writ applicant. Upon receipt of this intimation, the writ applicant shall appear before the authority and make submissions, after which the respondent No. 2 shall pass an appropriate order in accordance with law. The Court explicitly clarified that it had not gone into the merits of the matter.

Facts

The petitioner, Hasimkhan Liyakatkhan Pathan, proprietor of a business dealing in iron and scrap, filed a writ application challenging an order passed under Section 74 of the Goods and Services Tax Act, 2017, on May 22, 2020. The petitioner contended that this order, which was issued during the lockdown period, was passed without providing him with an opportunity of hearing, thus violating principles of natural justice. The petitioner sought to quash the order and prevent recovery actions. The High Court requested the respondent State to take instructions on whether the authority would be willing to recall the order and pass a fresh one after providing a hearing. The Department agreed to this proposal.

Key Issues

1. Whether the order passed under Section 74 of the Goods and Services Tax Act, 2017, on May 22, 2020, is liable to be quashed and set aside for being passed without affording the petitioner an adequate opportunity of hearing, thereby violating the principles of natural justice, particularly considering it was issued during a complete lockdown period? Petitioner's Argument: The petitioner argued that the impugned order was passed in blatant violation of the principles of natural justice as no opportunity of hearing was provided. The order was passed during the lockdown period without following the due process of assessment and adjudication under Sections 73/74 of the GST Acts. The petitioner sought directions to quash the order and prevent coercive recovery actions without a proper hearing and verification of documents and evidence. The petitioner also prayed for allowing input tax credit on genuine purchases. Revenue's Argument: The judgment records that the Department, through the learned Assistant Government Pleader, agreed to give an opportunity of hearing to the writ applicant and thereafter pass an appropriate fresh order. No specific arguments were recorded for the revenue beyond this agreement.