M/S Om Prakash Mishra Raipur Kotsarai Thru. Proprietor Om Prakash Mishra vs. State Of U.P. Thru. Prin. Secy. Tax Lko. And 3 Others

Facts

The petitioner, M/S Om Prakash Mishra Raipur Kotsarai, through its proprietor Om Prakash Mishra, filed a writ petition challenging two orders. The first order, dated 27.07.2022, was passed under Section 73 of the GST Act. The second order, dated 11.03.2024, dismissed the petitioner's appeal against the first order. The petitioner contended that they were not granted an opportunity of hearing before the initial order was passed, which is a mandatory requirement under Section 75(4) of the GST Act. The State was represented by the learned Standing Counsel.

Held

The Court held that the impugned orders dated 27.07.2022 and 11.03.2024 were liable to be quashed. The reasoning adopted by the Court was based on the judgment in M/S Rizvi Medical Agency (supra), which established that a failure to provide an opportunity of hearing before passing an order under the GST Act violates the principles of natural justice. The Court found that the petitioner was not granted the mandatory opportunity of hearing as required by Section 75(4) of the GST Act. Consequently, the ratio decidendi is that any order passed in violation of the right to a hearing under Section 75(4) of the GST Act is void. The Court quashed both the order dated 27.07.2022 and the subsequent appellate order dated 11.03.2024. The respondents were granted liberty to pass a fresh order after providing the petitioner with an opportunity of hearing, in accordance with the law.

Key Issues

1. Whether the order dated 27.07.2022, passed under Section 73 of the GST Act, is liable to be quashed for violation of the principles of natural justice, specifically the right to a hearing as mandated by Section 75(4) of the GST Act? The petitioner argued that the impugned order dated 27.07.2022 was passed without providing them with an adequate opportunity of hearing, which is a mandatory procedural requirement under Section 75(4) of the GST Act. They relied on the judgment of this Court in M/S Rizvi Medical Agency vs. State of U.P. & Ors.; Neutral Citation No.-2024:AHC-LKO:81107, which they stated squarely covers this issue. The respondent-State, through the learned Standing Counsel, did not record any specific arguments against this contention in the judgment.