M/S Avcom Media PVT LTD vs. State Of U.P. And Another
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The petitioner, M/s AVCOM Media Pvt Ltd, is aggrieved by an order dated 16.08.2024 passed by the Deputy Commissioner, State Tax, Kanpur, which created a demand of Rs. 11,07,903.90. The petitioner received a show cause notice under Section 73 of the Goods and Services Tax Act, 2017. The notice indicated the same date for filing a reply and for a hearing. The petitioner filed a reply, explaining that tax was returned as payable on a Reverse Charge Mechanism (RCM) basis due to a mistake arising from the late receipt of bills, and submitted supporting documents. The authority, while noting the reply and observing it was not supported by documents, passed the impugned order without providing any opportunity of hearing to the petitioner.
Held
The Court held that the impugned order dated 16.08.2024 passed by the Deputy Commissioner, State Tax, Kanpur, is unsustainable. The Court found that the petitioner was not provided with an opportunity of hearing, which is a mandatory requirement under Section 75(4) of the Goods and Services Tax Act, 2017, when an authority intends to pass an order against a person. The Court reasoned that even if the authority concluded that the petitioner's reply was not supported by documents, it was incumbent upon the authority to provide the petitioner with an opportunity to be heard before passing an adverse order. Since this procedural safeguard was not followed, the order could not be sustained. Consequently, the petition was allowed, the impugned order was set aside, and the matter was remanded back to the authority. The authority is directed to provide the petitioner with an opportunity of hearing and thereafter pass a fresh order in accordance with the law.
Key Issues
1. Whether the impugned order dated 16.08.2024 passed by the Deputy Commissioner, State Tax, Kanpur, is liable to be set aside for violation of the principles of natural justice, specifically the requirement of providing an opportunity of hearing under Section 75(4) of the Goods and Services Tax Act, 2017, when the authority intended to pass an order against the petitioner? Petitioner's Contention: The petitioner argued that the show cause notice had a flawed hearing date, and crucially, the authority passed an order without affording them a hearing, despite the petitioner filing a reply and submitting documents. They contended that once the authority formed an adverse opinion on the reply due to lack of documents, an opportunity of hearing was mandatory under Section 75(4) of the Act. Therefore, the order passed without such an opportunity is unsustainable. Respondent's Contention: The judgment records no specific arguments from the respondent State.
Sections Cited
Section 73, Section 75(4)
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:82825-DB Chief Justice's Court Case :- WRIT TAX No. - 2343 of 2025 Petitioner :- M/s AVCOM Media Pvt Ltd Respondent :- State of U.P. and another Counsel for Petitioner :- Aditya Pandey Counsel for Respondent :- Ankur Agarwal, S.C. Hon'ble Arun Bhansali,Chief Justice Hon'ble Kshitij Shailendra,J.
The petition has been filed by the petitioner aggrieved of the order dated 16.08.2024 passed by the Deputy Commissioner, State Tax, Sector-10, Kanpur wherein demand to the tune of Rs. 11,07,903.90 has been created.
Submissions have been made that the show cause notice issued to the petitioner under Section 73 of the Goods and Services Tax Act, 2017 (for short 'the Act, 2017'), though provided last date of filing reply, in the column pertaining to the date of hearing, the same date by which the reply was to be submitted i.e. 18.06.2024 was indicated.
Submissions have been made that reply to the show cause notice was filed inter-alia seeking to respond to the issues raised in the show cause notice, including indications that by mistake due to late receipt of bills indicated in the reply, tax was returned as payable on RCM basis and along with the reply, documents were filed seeking to substantiate the same.
Further submissions have been made that the authority apparently without providing any opportunity of hearing in the context of reply filed by the petitioner, though noticing the reply
and observing that the reply was not supported by documents, passed the order on 16.08.2024. 5. Admittedly, the petitioner was not provided any opportunity of hearing. Section 75(4) of the Act requires that in case the authority intends to pass an order against a person, he is required to provide an opportunity of hearing. Once, for lack of documents, the authority came to the conclusion that the plea raised was not acceptable, it was incumbent on the authority to provide opportunity of hearing to the petitioner, on failure of providing opportunity of hearing, the order impugned cannot be sustained.
Consequently, the petition is allowed. The order impugned dated 16.08.2024 is set aside. The matter is remanded back to the authority, which would provide opportunity of hearing to the petitioner and, thereafter, pass a fresh order in accordance with law. Order Date :- 17.5.2025 nd (Kshitij Shailendra, J) (Arun Bhansali, CJ) NISITH DEY 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.