Dr. Ambedakar Enterprisese, Through Its Proprietor, Mr. Munib Ram vs. State Of U.P. And Another

Facts

Dr. Ambedkar Enterprisese, through its proprietor Mr. Munib Ram (the petitioner), challenged an order dated 30.11.2022 passed by the Assistant Commissioner, State Tax, Sector-2, Ghazipur. This order was issued under Section 73(8) of the U.P. Goods and Services Tax Act, 2017, for the tax period 2018-19. The petitioner contended that the order was passed ex parte, denying them an opportunity of hearing. A show cause notice was issued on 10.6.2022, fixing the personal hearing for 24.6.2022 and the final reply date for 9.7.2022. Although the petitioner failed to appear on the hearing date, no further notice or hearing date was fixed. The impugned order was passed approximately five months after the scheduled hearing date. The respondent argued that the petitioner failed to file a reply or seek an extension and approached the High Court with delay.

Held

The Court held that the rules of natural justice were breached. While acknowledging that the petitioner might have been at fault for not filing a reply on the fixed date and not seeking an extension, the Court found that the adjudicating authority erred by not fixing another date for hearing after the initial date passed without an order being issued. The authority should have fixed another date for hearing, especially since no order was passed on the scheduled date. The Court also noted the petitioner's fault in not filing an appeal within the limitation period and approaching the High Court with delay. To balance equities, the Court directed that if the petitioner deposits Rs. 75,000/- before the adjudicating authority within three weeks, the impugned order shall be set aside. Subsequently, the petitioner would have two weeks to file their reply, after which the adjudicating authority may fix a fresh date and proceed in accordance with law. The petitioner undertook not to seek undue adjournments.

Key Issues

1. Whether the impugned order dated 30.11.2022, passed by the Assistant Commissioner, State Tax, Sector-2, Ghazipur, under Section 73(8) of the U.P. Goods and Services Tax Act, 2017, is liable to be set aside on the ground of violation of principles of natural justice by denying the petitioner an opportunity of hearing? Petitioner's Contention: The petitioner argued that the order was ex parte and that despite their failure to appear on the initially fixed date for personal hearing, no subsequent date was fixed, nor was any notice served before the order was passed. They emphasized that the order was passed significantly later than the scheduled dates. Respondent's Contention: The respondent argued that the petitioner failed to file any reply or make any application to submit a reply even after the due date fixed in the notice had expired. They also contended that the petitioner chose not to file an appeal against the impugned order and approached the High Court with delay.