M/S Arihant Cement Agencies Thru. Proprietor Shobha Jain vs. State Of U.P. Thru. Prin. Secy. (Deptt Of State Tax) Govt. Of U.P. Lko. And 2 Others

Facts

The petitioner, M/s Arihant Cement Agencies, through its Proprietor Shobha Jain, challenged two orders. The first order, dated 11.06.2024, was passed under Section 73 of the GST Act by an unspecified authority. The second order, dated 21.02.2025, dismissed the petitioner's appeal against the first order. The petitioner's primary contention was that no hearing was granted before the initial order under Section 73 was passed. The Standing Counsel for the respondent State of U.P. acknowledged that the date fixed for filing a reply and the date of hearing were the same.

Held

The Court allowed the present petition, quashing the orders dated 11.06.2024 and 21.02.2025. The Court's decision was based on the sole ground that the petitioner was not granted a proper opportunity of hearing before the order under Section 73 of the GST Act was passed. The Court followed its previous judgment in Writ Tax No.303 of 2024 (Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr.). The matter was remanded to the assessing authority with a direction 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 unsustainable.

Key Issues

1. Whether the order passed under Section 73 of the GST Act is vitiated due to the denial of a proper hearing to the petitioner? (Question of law) Petitioner's Argument: The petitioner argued that the order under Section 73 of the GST Act was passed without affording them a proper opportunity of hearing. They relied on a circular issued by the respondents which mandates fixing two separate dates: one for filing a reply and another for hearing. This procedure was not followed in their case. Respondent's Argument: The Standing Counsel for the respondent State of U.P., based on instructions, conceded that the date fixed for filing the reply and the date of hearing were identical, implying a lack of separate opportunities.