M/S Sriram Traders Thru. Proprietor Ajay Kumar Gupta And Another vs. State Of U.P. Thru. Prin. Secy. State Tax, Lko. And Another

Facts

The petitioner, M/s Sriram Traders, through its proprietor Ajay Kumar Gupta and another, challenged two orders. The first order, dated 08.12.2023, was passed under Section 73 of the GST Act. The second order, dated 24.04.2024, dismissed the petitioner's appeal against the first order. The petitioner contended that both impugned orders were passed without providing an adequate opportunity of hearing. The respondent, State of U.P. through Principal Secretary, State Tax, Lko. and another, stated that the date fixed for submission of reply and hearing was the same.

Held

The Court held that fixing the same date for the submission of a reply and for the final hearing is contrary to established circulars and principles of natural justice. This practice has been considered by a Division Bench of the same Court in the case of Mahaveer Trading Company vs Deputy Commissioner State Tax and another (Writ Tax No.303 of 2024, decided on 04.03.2024). Consequently, the impugned orders dated 08.12.2023 and 24.04.2024 were quashed. The Court found that the procedural defect of not providing adequate opportunity of hearing rendered the orders unsustainable. The matter was remanded back to the Assessing Authority to pass a fresh order in accordance with law after providing an adequate opportunity of hearing to the petitioner. The ratio decidendi is that a hearing must be meaningful and not a mere formality, requiring sufficient time for the assessee to present their case.

Key Issues

1. Whether the orders impugned, dated 08.12.2023 (under Section 73 of the GST Act) and 24.04.2024 (dismissing the appeal), are sustainable in law when passed without affording an adequate opportunity of hearing to the petitioner? (Question of law). The petitioner argued that the impugned orders were passed in violation of natural justice principles, specifically the right to be heard, as no proper opportunity for hearing was given. The respondent, based on instructions, contended that the same date was fixed for the submission of the reply and for the final hearing, implying that an opportunity was provided.