M/S Prem Traders Faizabad Thru. Proprietor Smt. Darshan Kumari vs. State Of U.P. Thru. Addl. Chief Secy. State Tax, Lko. And 2 Others

Facts

The petitioner, M/s Prem Traders Faizabad, through its proprietor Smt. Darshan Kumari, filed a writ petition challenging an order dated 29.04.2024 passed under Section 73 of the GST Act. The petitioner contended that the impugned order was passed without providing an opportunity of hearing. The respondent, State of U.P. through the Additional Chief Secretary, State Tax, Lko., and two others, stated that no specific date for hearing was fixed, and the date fixed was for filing objections and for hearing. The respondent acknowledged that the manner of fixing the date was against a departmental circular and a judgment of the High Court.

Held

The Court held that the impugned order dated 29.04.2024, passed under Section 73 of the GST Act, was liable to be quashed. The Court found that the order was passed without providing the petitioner with an adequate opportunity of hearing. This was supported by the respondent's own admission that the manner of fixing the date for hearing was against a departmental circular and a judgment of the Division Bench of the Court in Mahaveer Trading Company vs Deputy Commissioner State Tax and another. The Court reasoned that adherence to principles of natural justice is paramount. Therefore, the impugned order was quashed, and 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 writ petition was allowed.

Key Issues

1. Whether the impugned order dated 29.04.2024, passed under Section 73 of the GST Act, is liable to be quashed for being passed without providing an adequate opportunity of hearing to the petitioner? (Question of law and fact, concerning principles of natural justice and Section 73 of the GST Act). Petitioner's Contention: The petitioner argued that the order was passed without affording them a proper hearing, violating principles of natural justice. Respondent's Contention: The respondent stated that the date fixed was for filing objections and hearing, and that the procedure followed was in line with departmental instructions. However, they conceded that the manner of fixing the date was against a departmental circular and a precedent set by the High Court in Mahaveer Trading Company vs Deputy Commissioner State Tax and another.