M/S J J Timber, Lucknow Thru. Proprietor Jameel Ahmed vs. State Of U.P. Thru. Chief Secy., Tax And Registration, Lucknow And Others

Held

The Court held that the order dated 23.12.2023, passed under Section 73 of the GST Act, was in violation of the principles of natural justice and Section 75(4) of the GST Act because no hearing date was fixed, and the petitioner was not afforded an opportunity of hearing. The Court found no material from the respondents to suggest otherwise. Consequently, the main order dated 23.12.2023 was quashed. As a direct result of the quashing of the primary order, the appellate order dated 05.07.2024, which dismissed the appeal as not maintainable, was also set aside. The matter was remanded to respondent no. 2 to pass a fresh order in accordance with the law, ensuring that the petitioner is given an opportunity of hearing. The ratio decidendi is that a mandatory hearing, as stipulated by Section 75(4) of the GST Act and principles of natural justice, must be provided before passing an order under Section 73.

Facts

The petitioner, M/s J J Timber, Lucknow, challenged an order dated 23.12.2023 passed by respondent no. 2 under Section 73 of the GST Act. The petitioner also challenged a subsequent order dated 05.07.2024, which dismissed their appeal as not maintainable. The petitioner's primary contention was that no hearing date was fixed after the issuance of the notice under Section 73, which they argued is mandatory. The respondents did not provide any material to suggest that a hearing was fixed or that the petitioner was given an opportunity to be heard. This procedural lapse was considered a violation of the principles of natural justice and Section 75(4) of the GST Act.

Key Issues

1. Whether the order dated 23.12.2023, passed under Section 73 of the GST Act, is vitiated by a violation of the principles of natural justice and Section 75(4) of the GST Act due to the non-fixing of a hearing date? Petitioner's Contention: The petitioner argued that the issuance of a notice under Section 73 of the GST Act necessitates the fixing of a hearing date, which is mandatory as per Section 75(4) of the GST Act. They relied on two judgments of the High Court: Party Time Hospitality Prop. Smt. Punita Gupta Lko. v. State of U.P. & Ors. (Writ Tax No.176 of 2023) and M/S Chaudhary Associates, Lko. Thru. Partner v. State of U.P. & Ors. (Writ Tax No.250 of 2024). Respondent's Contention: The judgment records no specific argument from the respondents regarding the fixing of a hearing date or compliance with Section 75(4).