M/S Shivam Trading Company Thru. Proprietor Rajesh Gupta Distt. Hardoi vs. State Of U.P. Thru. Addl. Chief Secy. Tax And Registration, Lucknow And 3 Others

Held

The Court held that the order dated 21.05.2022, passed under Section 73 of the GST Act, was passed without adhering to the mandatory provisions of Section 75(4) of the GST Act, which requires an opportunity of hearing to be provided. This non-compliance also violated the principles of natural justice. Consequently, both the order dated 21.05.2022 and the subsequent appellate order dated 30.08.2024 were quashed. The matter was remanded to the Assessing Authority to pass a fresh order after providing the petitioner with an adequate opportunity of hearing. The ratio decidendi is that a statutory order passed without affording the mandatory opportunity of hearing is void and liable to be set aside.

Facts

The petitioner, M/s Shivam Trading Company, through its proprietor Rajesh Gupta, filed a writ petition challenging two orders. The first order, dated 21.05.2022, was passed under Section 73 of the GST Act. The second order, dated 30.08.2024, dismissed the petitioner's appeal against the first order. The petitioner contended that the order under Section 73 was passed without providing an opportunity of hearing, which is a mandatory requirement. The revenue, represented by the Standing Counsel, did not dispute this fact. The High Court considered the lack of opportunity for hearing as a violation of principles of natural justice and statutory mandate.

Key Issues

1. Whether the order dated 21.05.2022, passed under Section 73 of the GST Act, is liable to be quashed for non-compliance with the mandatory requirement of granting an opportunity of hearing as stipulated in Section 75(4) of the GST Act? Petitioner's Contention: The petitioner argued that the order under Section 73 of the GST Act was passed without affording them a 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 Shakti Brick Field Hardoi vs. State of U.P. & Ors.; Neutral Citation No.-2024:AHC-LKO:77782. Respondent's Contention: The learned Standing Counsel for the State could not dispute the fact that no opportunity of hearing was granted to the petitioner.