Bala Ji Traders Gonda Thru. Proprietor Vijay Kumar vs. State Of U.P. Thru. Addl. Chief Secy. Deptt. Of Institutional Finance U.P. Lko. And 2 Others

Facts

The petitioner, Bala Ji Traders Gonda, through its proprietor Vijay Kumar, filed a writ petition challenging an order dated 12.05.2023 passed under Section 74 of the GST Act. The petitioner also challenged an order in appeal dated 04.03.2025, which had dismissed their appeal on the grounds of delay. The primary contention raised by the petitioner's counsel was that no opportunity of hearing was provided before the impugned order under Section 74 was passed, a fact that was not denied by the learned Standing Counsel for the State.

Held

The Court held that the impugned order dated 12.05.2023 passed under Section 74 of the GST Act was in violation of Section 75(4) of the GST Act, which mandates an opportunity of hearing, and consequently violated Article 14 of the Constitution of India. This finding was based on the petitioner's submission that no hearing was granted, which was not denied by the State. The Court also noted that the appellate order dated 04.03.2025 was dismissed on the ground of delay. Consequently, both the order dated 12.05.2023 and the appellate order dated 04.03.2025 were quashed. The matter was remanded to the assessing authority to pass a fresh order after providing the petitioner with an adequate opportunity of hearing. The ratio decidendi is that an order passed in violation of the principles of natural justice, specifically the right to be heard, is void ab initio and liable to be set aside, with a direction for fresh consideration.

Key Issues

1. Whether the order dated 12.05.2023 passed under Section 74 of the GST Act is liable to be quashed for violating the principles of natural justice by not providing an opportunity of hearing to the petitioner, as mandated by Section 75(4) of the GST Act and Article 14 of the Constitution of India? The petitioner argued that the order itself demonstrates a lack of hearing. The respondent State did not contest this point. 2. Whether the appellate order dated 04.03.2025, which dismissed the appeal on the ground of delay, should also be set aside in light of the defects in the original order? The petitioner's argument implicitly covers this by challenging both orders. The respondent State did not present arguments on this issue.