Chennai Msw Private Limited vs. State Of Uttar Pradesh And Another
Original PDF →Facts
The petitioner, Chennai Msw Private Limited, filed a writ petition challenging an order dated February 27, 2025, passed by the Deputy Commissioner, State Tax, NOIDA, under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner contended that the order was passed in violation of principles of natural justice. The Court noted that the factual matrix was similar to a previous case, Mahaveer Trading Company vs. Deputy Commissioner State Tax and another, which dealt with procedural irregularities in personal hearings and the issuance of orders. The previous judgment highlighted issues such as mentioning 'N.A.' for hearing dates, scheduling hearings before the reply submission deadline, and passing orders on dates other than the personal hearing date.
Held
The Court held that the impugned order dated February 27, 2025, passed by the Deputy Commissioner, State Tax, NOIDA, could not be sustained in law as it was passed in gross violation of the fundamental principles of natural justice. The Court found the factual matrix to be similar to the case of Mahaveer Trading Company, where procedural irregularities concerning personal hearings were observed. Specifically, the practice of not affording a proper personal hearing before passing an adverse order was deemed unacceptable. The Court reasoned that a personal hearing must be offered to the noticee before any adverse order is passed, unless the right is waived or the noticee fails to avail it after being granted the opportunity. The Court quashed and set aside the impugned order. The Court 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 thereafter. The entire exercise was to be completed within two months. The Court noted that the appeal authority does not have the authority to remand proceedings, but in this writ petition, the Court itself was remanding the matter for fresh consideration.
Key Issues
1. Whether the order dated February 27, 2025, passed by the Deputy Commissioner, State Tax, NOIDA, under Section 73 of the UPGST Act, 2017, is sustainable in law, considering alleged violations of natural justice principles, specifically regarding the opportunity of personal hearing? Petitioner's Contention: The petitioner argued that the impugned order was passed in gross violation of fundamental principles of natural justice, as they were not afforded a proper opportunity for personal hearing. They relied on the principles laid down in the coordinate Bench judgment of Mahaveer Trading Company vs. Deputy Commissioner State Tax and another. Respondent's Contention: The State respondents, represented by the learned Standing Counsel, did not present any specific arguments against the petitioner's claim of violation of natural justice, implicitly accepting the procedural issues raised.
Sections Cited
Section 73
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:108991-DB Court No. - 3 Case :- WRIT TAX No. - 2077 of 2025 Petitioner :- Chennai Msw Private Limited Respondent :- State Of Uttar Pradesh And Another Counsel for Petitioner :- Divyanshu Pandey,Utkarsh Malviya Counsel for Respondent :- C.S.C. Hon'ble Shekhar B. Saraf,J. Hon'ble Praveen Kumar Giri,J.
Heard Sri Utkarsh Malviya, learned counsel appearing on behalf of the petitioner and Sri Ankur Agarwal, learned Standing Counsel appearing on behalf of the State respondents.
This is a writ petition under Article 226 of the Constitution of India wherein the writ petitioner is aggrieved by the order dated February 27, 2025 passed by the respondent No.2/Deputy Commissioner, State Tax, Sector-12, NOIDA, Gautam Budh Nagar under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the 'UPGST Act').
The factual matrix is such that the matter is squarely covered by Neutral Citation No.-2024:AHC:38820-DB. Relevant portion of the aforesaid judgment is delineated below:- "
On query made, the learned Additional Chief Standing Counsel fairly submits, in light of similar occurrences, noticed in other litigation, he had apprised the Commissioner, Commercial Tax. In turn, the Commissioner, Commercial Tax, Uttar Pradesh, has issued Office Memo No. 1406 dated 12.01.2024. The same has been addressed to all Additional Commissioner to be communicated to all field formations for necessary compliance. A copy of the same has been made available to this Court. It reads as below:
"
The column in which date of personal hearing has to be mentioned, only N.A. is mentioned without mentioning any date.
The column in which time of personal hearing has to be mentioned, only N.A. is mentioned without mentioning time of hearing.
In some cases, the date of personal hearing is prior to which reply to the Show Cause Notice has to be submitted this is non-est and this practice has to be discontinued. The date of reply to the Show Cause Notice has to be definitely prior to the date of personal hearing.
In some cases, the date of personal hearing is on the same date to which reply to the Show Cause Notice has to be submitted-this is non-est and this practice has to be discontinued. The date of reply to the Show Cause Notice has to be definitely prior to the date of personal hearing.
In all cases observed, the date of passing order either u/s 73(9)/74(9) etc. of the Act is not commensurate to the date of personal hearing. It is trite law that the date of the order has to be passed on the date of personal hearing. For eg.,the date of furnishing reply to SCN is 15.11.2023 and date of personal hearing is 17.11.2023, then the date of order has to be 17.11.2023"
In view of the facts noted above, before any adverse order passed in an adjudication proceeding, personal hearing must be offered to the noticee. If the noticee chooses to waive that right, occasion may arise with the adjudicating authority, (in those facts), to proceed to deal with the case on merits, ex-parte. Also, another situation may exist where even after grant of such opportunity of personal hearing, the noticee fails to avail the same. Leaving such situations apart, we cannot allow a practice to arise or exist where opportunity of personal hearing may be denied to a person facing adjudication proceedings.
Thus, the impugned order cannot be sustained in the eyes of law. It has been passed in gross violation of fundamental principles of natural justice. The self imposed bar of alternative remedy cannot be applied in such facts. If applied, it would be of no real use. In fact, it would be counter productive to the interest of justice. Here, it may be noted, the appeal authority does not have the authority to remand the proceedings."
Upon a perusal of record, it appears that the factual matrix is very similar to one in Mahaveer Trading Company's (supra). We do not see any reason to take a different stand.
Accordingly, the impugned order dated February 27, 2025 passed by the respondent No.2 is quashed and set-aside with a direction given to the officer concerned to grant the petitioner another opportunity of filing a fresh reply and thereafter fix a date of hearing and pass a reasoned order. The entire exercise should be completed within a period of two months from date.
With the aforesaid directions, the writ petition is disposed of. Order Date :- 9.7.2025 Kuldeep (Praveen Kumar Giri, J.) (Shekhar B. Saraf, J.) KULDEEP SINGH High Court of Judicature at Allahabad
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.