M/S Pushpa Distributors PVT. LTD. Thru. Director Mr. Kunal Bhandari vs. State Of U.P. Thru. Additional Chief Secretary, State Tax, Lucknow And 3 Others

Facts

M/s Pushpa Distributors Pvt. Ltd. (Petitioner) filed a writ petition challenging an order dated 14.12.2023 passed under Section 73 of the GST Act and a subsequent order dated 27.07.2024 that dismissed their appeal as being beyond limitation. The Petitioner's primary contention was that no opportunity of hearing was provided before the initial order under Section 73 was passed. The Standing Counsel for the State acknowledged that 'NA' was mentioned against the hearing date in the notice. The Petitioner relied on a previous judgment by the same High Court in Writ Tax No. 303 of 2024 (Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr.) dated 04.03.2024.

Held

The Court held that the order dated 14.12.2023 passed under Section 73 of the GST Act was non-compliant with the mandate of Section 75(4) of the GST Act, which requires an opportunity of hearing to be provided. The Court found that the absence of a proper hearing before passing the order violated the principles of natural justice. Following its own previous judgment in Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr., the Court quashed both the order dated 14.12.2023 and the subsequent appellate order dated 27.07.2024. The matter was remanded to the assessing authority to pass a fresh order after affording an adequate opportunity of hearing to the Petitioner. The ratio decidendi is that an order passed under Section 73 of the GST Act without providing a proper opportunity of hearing is unsustainable and liable to be set aside.

Key Issues

1. Whether the order dated 14.12.2023 passed under Section 73 of the GST Act is liable to be quashed for non-compliance with the principles of natural justice, specifically the requirement of granting an opportunity of hearing, as mandated by Section 75(4) of the GST Act? Petitioner's Argument: The Petitioner argued that no opportunity of hearing was granted prior to the passing of the order under Section 73 of the GST Act, rendering the order invalid. They relied on the judgment in Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr. Respondent's Argument: The Standing Counsel for the State did not dispute the Petitioner's assertion, acknowledging that 'NA' was mentioned against the date fixed for hearing in the notice.