M/S Sri Mahakaleswar Ji Enterprises Thru. Auth. Signatory Mr. Anoop Kumar(Accountant) vs. Assistant Commissioner State Tax, Division 2, Lakhimpur Kheri And Another

Facts

The petitioner, M/s Sri Mahakaleswar Ji Enterprises, challenged an order dated 26.04.2024 passed by the Assistant Commissioner, State Tax, under Section 73 of the GST Act. The petitioner also challenged a subsequent order dated 05.12.2024, which dismissed their appeal as being time-barred. The core of the petitioner's argument was that the initial order under Section 73 was passed without providing the mandatory opportunity of hearing as required by Section 75(4) of the Act. The revenue was represented by the Assistant Commissioner, State Tax, and the Standing Counsel.

Held

The Court allowed the petition, quashing both the order dated 26.04.2024 passed by the Assistant Commissioner and the order dated 05.12.2024 dismissing the appeal. The Court followed the ratio of the cited judgment in Writ Tax No.1029 of 2021. The reasoning was that the initial order under Section 73 of the GST Act was passed without adhering to the mandatory requirement of providing an opportunity of hearing to the petitioner, as stipulated in Section 75(4) of the Act. This procedural defect vitiated the order. Consequently, the appellate order dismissing the appeal as time-barred was also set aside as it stemmed from the flawed initial order. The matter was remanded to the assessing authority to pass a fresh order in accordance with law after granting the petitioner an opportunity of hearing. The Court also directed the refund of any amount deposited by the petitioner during the appeal proceedings upon their application.

Key Issues

1. Whether the order dated 26.04.2024 passed by the Assistant Commissioner under Section 73 of the GST Act is liable to be quashed for non-compliance with the principles of natural justice, specifically the requirement of providing an opportunity of hearing under Section 75(4) of the Act? The petitioner argued that the order under Section 73 was passed without affording them a proper hearing, which is a mandatory requirement under Section 75(4) of the GST Act. They relied on the judgment in Writ Tax No.1029 of 2021 (Bharat Mint and Allied Chemicals vs. Commissioner Commercial Tax) decided on 04.03.2022, which apparently dealt with similar procedural irregularities. The revenue did not record any specific arguments against this contention.