Kenda Farben INDIA Private Limited vs. Deputy Commissioner State Tax, Sector-13, Noida, Gautam Budh Nagar And Another
Original PDF →Facts
The petitioner, Kenda Farben India Private Limited, is challenging an order dated 11.02.2025 passed by the Deputy Commissioner State Tax under Section 73 of the U.P. Goods and Services Tax Act, 2017. The order pertains to the tax period April 2020 to March 2021 and imposes a demand of Rs. 3,26,52,695/-. The petitioner had initially received a notice under Section 61 for discrepancies, to which they responded with documents. Subsequently, a notice under Section 73 was issued, and the petitioner again filed a response with supporting documents. However, the petitioner alleges that no date for a personal hearing was fixed, and the impugned order was passed mechanically, rejecting their response by stating it lacked evidence, which the petitioner claims is factually incorrect.
Held
The Court held that the order impugned could not be sustained. It found that the authority's observation that no evidence was filed with the response to cross-verify the petitioner's statements was factually incorrect, as the record showed documents were annexed with the replies to notices under Sections 61 and 73. The Court also noted the undisputed fact that no opportunity of personal hearing was accorded to the petitioner, despite the requirement under Section 75(4) of the Act when an adverse order is proposed. The Court reasoned that the failure to provide a personal hearing resulted in the documents filed by the petitioner not even being noticed by the authority. Consequently, the petition was allowed, the order dated 11.02.2025 was quashed and set aside, and the matter was remanded back to the authority for a fresh decision after providing the petitioner an opportunity of personal hearing.
Key Issues
1. Whether the order passed by the respondent no. 1 under Section 73 of the U.P. Goods and Services Tax Act, 2017, is vitiated due to the denial of a personal hearing to the petitioner, as mandated by Section 75(4) of the Act? Petitioner's arguments: The petitioner contended that the authority's action of depriving them of a personal hearing and passing a mechanical order renders the impugned order invalid. They argued that their response was rejected by stating it lacked evidence, which was factually incorrect as documents were annexed with each reply. They asserted that if a personal hearing had been granted, these documents would have been presented and explained, leading to a different outcome. Respondent's arguments: The respondents argued that the pleas raised by the petitioner were not supported by documents, and therefore, the impugned order did not warrant interference. However, they did not dispute that no date for a personal hearing was fixed as per Section 75(4) of the Act.
Sections Cited
Section 73, Section 61, Section 75(4)
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:67616-DB Chief Justice's Court Case :- WRIT TAX No. - 1807 of 2025 Petitioner :- Kenda Farben India Private Limited Respondent :- Deputy Commissioner State Tax, Sector-13, Noida, Gautam Budh Nagar and another Counsel for Petitioner :- Suyash Agarwal Counsel for Respondent :- C.S.C., Ankur Agarwal (S.C.) Hon'ble Arun Bhansali,Chief Justice Hon'ble Vikas Budhwar,J.
This petition is directed against the order dated 11.02.2025 passed by respondent no. 1 under Section 73 of the U.P. Goods and Services Tax Act, 2017 ('the Act') for the tax period April, 2020 to March, 2021. 2. The petitioner was issued notice under Section 61 of the Act, inter alia, requiring it to clarify the discrepancies in the return which were detected after scrutiny. The petitioner filed a detailed response along with documents. Apparently, the same was not taken into consideration and identical notice under Section 73 was issued to the petitioner to which also petitioner filed response along with documents. No date of hearing was fixed by the Assessing Authority and the order impugned dated 11.02.2025 was passed rejecting the response filed by the petitioner and raising demand to the tune of Rs. 3,26,52,695/-.
Learned counsel for the petitioner made submissions that action of the respondents in depriving the petitioner of personal hearing and passing an order in the mechanical manner vitiates the order impugned. Submissions have been made that the authority has rejected the response filed by the petitioner only by indicating that the reply filed does not contain evidence, which is factually incorrect inasmuch as with each response to several aspects raised by the respondents, documents were annexed, however, apparently, the same have not been taken into consideration and, therefore, the order impugned deserves to be quashed and set aside.
Further submissions have been made that, in case, the petitioner was provided personal hearing, all those documents would have been pointed out to the authority and on account of failure to provide opportunity of hearing, the same has resulted in baseless demand and, therefore, the order deserves to be set aside.
Learned counsel for the respondents attempted to make submissions that the plea though has been raised by the petitioner in response to the notices under Section 61 and 73, the same was not supported by documents and, therefore, the order impugned does not call for any interference. However, it is not disputed that no date for personal hearing as envisaged by Section 75(4) of the Act was fixed by the authority.
We have considered the submissions made by the counsel for the parties and have perused the material available on record.
The order impugned, while dealing with the response filed by the petitioner, indicates as under:- "जजाररी ननोटटिस कके अननुपजालन मके व्यजापजाररी दजारजा आनलजाइन स्पषरीकरण दजाखखिल टकयजा गयजा हहै। व्यजापजाररी दजारजा दजाखखिल स्पषरीकरण पर टविचजार टकयजा गयजा। टकन्तनु दजाखखिल जबजाब कके सम्बबंध मम सजाक्ष्यगत प्रमजाण सबंलग्न नहरी टकयजा गयजा हहै खजससके टक व्यजापजाररी कके कथन कजा Cross verify टकयजा जजा सकम। तथजा नहरी कनोई जमजा कजा प्रमजाण प्रस्तनुत टकयजा गयजा हहै। अतएवि दजाखखिल उत्तर असबंतनोषजनक पजायके जजानके कके कजारण टनम्न प्रकजार सके कर, ब्यजाज एविबं अथरदण्ड कजा दजाटयत्वि टनधजाररत टकयजा जजातजा हहै"
Perusal of the above would reveal that the authority observed
that no evidence in respect of the response has been filed so as to cross verify the same. However, the said indication made apparently, is contrary to record as is evident from the copies of the reply filed to the notices under Section 61 and 73 placed on record by the petitioner wherein in response to each point raised in the notices, petitioner has annexed documents. It is something different that the authority, after examining the documents, would have rejected the same, however, to indicate that no material has been produced along with the reply, is factually incorrect. It is also undisputed that provisions of Section 75(4) of the Act requires according of personal hearing, where the same is demanded and/or an adverse order is proposed to be passed. In the present case, no opportunity of personal hearing has been accorded to the petitioner and that the result of such failure is apparent wherein the documents filed along with the response have not even been noticed by the authority.
In view of the above discussion, the order impugned passed by the authority cannot be sustained.
Consequently, the petition is allowed. The order dated 11.02.2025 passed by the Deputy Commissioner under Section 73 of the Act is quashed and set aside. The matter is remanded back to the authority, who would provide an opportunity of personal hearing to the petitioner and thereafter pass a fresh order in accordance with law. Order Date :- 30.4.2025 P.Sri./Rajesh (Vikas Budhwar, J) (Arun Bhansali, CJ) PUNEET SRIVASTAVA 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.