M/S Jain Distributors,Ayodhya Thru. Its Proprietor Rajat Jain vs. State Of U.P. Thru. Prin. Secy. Tax And Registration,Lko. And 2 Others

Facts

The petitioner, M/s Jain Distributors, Ayodhya, through its Proprietor Rajat Jain, filed a writ petition challenging an order dated 04.04.2024 passed under Section 73 of the GST Act. This order confirmed a demand against the petitioner. The petitioner's primary contention was that they were not granted a mandatory opportunity of hearing as prescribed under Section 75(4) of the GST Act. The respondent State provided instructions indicating that while a notice was sent, the column for the date of personal hearing was marked 'N.A.'. The impugned order itself did not record that any opportunity of hearing was provided to the petitioner.

Held

The Court held that the provisions of Section 75(4) of the GST Act are mandatory and require an opportunity of hearing to be granted to the assessee before passing an order. The Court noted that the instructions produced by the State indicated 'N.A.' in the column for the date of personal hearing, and the impugned order did not record that any opportunity was afforded to the petitioner. Citing the Division Bench judgment in M/S Atlas Cycles Haryana Limited Versus State of U.P. and another, which held Section 75(4) to be mandatory, the Court found merit in the petitioner's submission. Consequently, the impugned order dated 04.04.2024 was quashed. The matter was remanded to the authority to pass a fresh order in accordance with law after affording a proper opportunity of hearing to the petitioner.

Key Issues

1. Whether the order dated 04.04.2024 passed under Section 73 of the GST Act is liable to be quashed on the ground of non-compliance with the mandatory provisions of Section 75(4) of the GST Act, which requires an opportunity of hearing to be granted to the assessee? Petitioner's Arguments: The petitioner argued that the order confirming the demand is illegal and unsustainable because the mandatory requirement of providing an opportunity of hearing under Section 75(4) of the GST Act was not met. They relied on the fact that the notice indicated 'N.A.' for the personal hearing date and the impugned order did not mention any hearing being afforded. Respondent's Arguments: The respondent State, through the learned Standing Counsel, produced instructions. While these instructions confirmed that a notice was sent, they also indicated 'N.A.' in the column for the date of personal hearing. The respondent did not otherwise contest the petitioner's submission regarding the lack of hearing.