M/S Vijay Shree Enterprises Thru. Authorised Signatory Prayag Dutt Tripathi vs. State Of U.P. Thru. Addl. Chief Secy. Tax And Registration Lko. And 2 Others

Facts

The petitioner, M/s Vijay Shree Enterprises, through its Authorized Signatory Prayag Dutt Tripathi, filed a writ petition challenging an order dated 22.04.2024 passed under Section 73 of the GST Act. The petitioner also challenged an order dated 27.03.2025 which dismissed their appeal as being beyond the limitation period. The primary contention raised by the petitioner's counsel was that no opportunity of hearing was granted to them before the impugned orders were passed. The Standing Counsel for the respondent State of U.P. acknowledged that while the first notice contained a hearing date, the reminder notice did not.

Held

The Court held that the order passed under Section 73 of the GST Act, dated 22.04.2024, and the subsequent appellate order dated 27.03.2025, which dismissed the appeal as time-barred, could not be sustained. The reasoning was that the order under Section 73 was passed without affording the petitioner any opportunity of hearing, thereby violating the principles of natural justice. The Court found this procedural defect to be fatal to the impugned orders. The ratio decidendi is that an order imposing tax liability or penalty under the GST Act must be preceded by a proper opportunity of hearing to the assessee. Consequently, both impugned orders were quashed. The matter was remanded back to the Assessing Authority to pass a fresh order in accordance with the law, after providing the petitioner with an adequate opportunity of hearing.

Key Issues

1. Whether the order passed under Section 73 of the GST Act is sustainable when no opportunity of hearing was afforded to the petitioner? (Question of law) 2. Whether the appellate order dismissing the appeal as time-barred is sustainable if the original order was passed without granting a proper hearing? (Question of mixed law and fact) The petitioner argued that the orders were passed in violation of the principles of natural justice, specifically the right to a fair hearing, as no opportunity was provided. The respondent, through the Standing Counsel, conceded that the reminder notice did not specify a date for hearing, which supports the petitioner's claim of a lack of proper opportunity. The respondent relied on the instructions received regarding the notices issued.