M/S Sandeep Cement And Iron Store Thru. Sandeep Kumar Agrawal vs. State Of U.P. Thru. Prin. Secy. Deptt. Of State Tax Lko And 2 Others

Facts

The petitioner, M/s Sandeep Cement And Iron Store, represented by Sandeep Kumar Agrawal, filed a writ petition challenging an order passed under Section 73 of the GST Act and a subsequent appellate order dated October 8, 2024. The appellate order had dismissed the petitioner's appeal on the grounds of limitation. The core of the petitioner's grievance was that no opportunity of hearing was provided before the initial order under Section 73 of the GST Act was passed. The respondent, State of U.P. through the Principal Secretary, Department of State Tax, Lko, and two others, was represented by the learned Standing Counsel. The tax period(s) are not specified in the judgment. The amount in dispute is not stated.

Held

The Court held that the order passed under Section 73 of the GST Act was indeed passed in violation of the mandatory provision of Section 75(4) of the GST Act, as the petitioner was not afforded an opportunity of hearing. The Court noted that the learned Standing Counsel, representing the State, verified this fact. Consequently, both the impugned order dated October 8, 2024 (appellate order) and the original order dated November 22, 2021 (order under Section 73) were quashed. The ratio decidendi is that a statutory mandate for an opportunity of hearing cannot be bypassed, and failure to comply renders the order invalid. The Court allowed the writ petition and remanded the matter to the Assessing Authority to pass a fresh order after providing the petitioner with a proper opportunity of hearing, in accordance with the law.

Key Issues

1. Whether the order passed under Section 73 of the GST Act is liable to be quashed for non-compliance with the mandatory requirement of affording an opportunity of hearing as stipulated under Section 75(4) of the GST Act? Petitioner's Contention: The petitioner argued that the order passed under Section 73 of the GST Act was passed without affording them a proper opportunity of hearing, which is a mandatory procedural requirement under Section 75(4) of the GST Act. They relied on the mandate of this provision. Revenue's Contention: The learned Standing Counsel, based on verified instructions, conceded that no opportunity of hearing was granted to the petitioner. Therefore, the revenue did not contest the petitioner's argument on this specific ground.