M/S S A R Instyle Lko. Thru. Its Partner Mr. Mohan Das Manglani Lko. vs. State Of U.P. Thru. Addl. Chief Secy. State Tax Lko. And 2 Others

Facts

The petitioner, M/s S A R Instyle Lko., through its Partner Mr. Mohan Das Manglani, filed a writ petition challenging an order passed under Section 73 of the GST Act dated August 13, 2024. The petitioner's primary contention was that the date of hearing mentioned in the notice served upon them was prior to the date on which they submitted their reply. The Standing Counsel for the State verified this factual assertion. The petitioner relied on a previous judgment of the same High Court in Writ Tax No. 303 of 2024 (Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr.) dated March 4, 2024, which dealt with a similar issue.

Held

The Court allowed the petition, quashing the order dated August 13, 2024. The Court found merit in the petitioner's contention that the notice issued for hearing was flawed because the hearing date was prior to the date of reply submission. This procedural defect was deemed to violate the principles of natural justice. Following its own previous judgment in Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr., the Court held that such a procedural lapse warrants interference. The matter was remanded to the assessing authority to pass a fresh order after providing the petitioner with a proper opportunity of hearing. The ratio decidendi is that a notice requiring a hearing before the submission of a reply is procedurally flawed and violates natural justice, necessitating a fresh adjudication.

Key Issues

1. Whether the order passed under Section 73 of the GST Act is vitiated due to the date of hearing in the notice being prior to the date of submission of the reply by the petitioner, thereby violating principles of natural justice? (Question of law and fact, turning on Section 73 of the GST Act). Petitioner's contention: The petitioner argued that the notice issued for hearing was defective as the hearing date preceded the submission of their reply. This procedural irregularity, they contended, prejudiced their right to be heard effectively. They relied on the judgment in Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr. to support their claim. Respondent's contention: The Standing Counsel for the State conceded to the factual assertion made by the petitioner regarding the dates of hearing and reply submission.