M/S Hindustan Enterprises vs. State Of Up And Another

Held

The Court held that the impugned order dated 29.8.2024, passed by the Deputy Commissioner, Sector-13, State Tax, Chetganj, Varanasi, Uttar Pradesh, could not be sustained in the eyes of law. The Court found that the order was passed in gross violation of the fundamental principles of natural justice, as evidenced by the procedural irregularities concerning personal hearings, similar to those observed in the Mahaveer Trading Company case. The Court reasoned that a personal hearing must be offered before any adverse order is passed in adjudication proceedings, 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. It 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. The entire exercise was to be completed within two months from the date of the order. The Court explicitly stated that the self-imposed bar of alternative remedy could not be applied in such facts, as it would be counterproductive to the interest of justice, and that the appeal authority does not have the authority to remand the proceedings.

Facts

The petitioner, M/s Hindustan Enterprises, filed a writ petition challenging an order dated 29.8.2024 passed by the Deputy Commissioner, Sector-13, State Tax, Chetganj, Varanasi, Uttar Pradesh, under Section 74 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 'N.A.' being mentioned instead of dates for personal hearings, hearing dates preceding reply submission dates, and orders being passed without commensurate personal hearing dates.

Key Issues

1. Whether the order dated 29.8.2024 passed by the respondent No.2 under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017, is sustainable in law, considering the procedural irregularities in the adjudication proceedings. Petitioner's Arguments: The petitioner argued that the order was passed in gross violation of the fundamental principles of natural justice, specifically concerning the denial of 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 Arguments: The respondent did not present any specific arguments against the petitioner's claim of violation of natural justice. The Court noted that the learned Additional Chief Standing Counsel had previously apprised the Commissioner, Commercial Tax, about similar occurrences, leading to the issuance of an Office Memo No. 1406 dated 12.11.2024, which addressed procedural deficiencies in personal hearings.