M/S D.R Construction Ramnagar Road Faizabad Thru. Its Partner Kaushal Kishore Pandey vs. State Of U.P. Thru.Its Addl. Chief Secy. Commercial Tax Deptt. Lko And 2 Others

Held

The Court held that the order dated 21.01.2022, passed under Section 73 of the GST Act, was in violation of Section 75(4) of the GST Act, which mandates providing an opportunity of hearing to the assessee before passing an order. The Court found that the petitioner's contention that no opportunity of hearing was granted was not denied by the respondent and was also not addressed in the impugned order. Following its own previous judgment in Writ-Tax No.176 of 2023, which dealt with a similar factual matrix concerning the lack of opportunity of hearing, the Court quashed both the order dated 21.01.2022 and the subsequent appellate order dated 14.03.2024. The Court directed the State to issue a fresh demand order in accordance with the law, ensuring that an opportunity of hearing is provided to the petitioner. The authority is required to specify the date, time, and place of hearing in the fresh notice.

Facts

The petitioner, M/s D.R Construction, through its partner Kaushal Kishore Pandey, challenged two orders. The first, dated 21.01.2022, was passed under Section 73 of the GST Act. The second, dated 14.03.2024, dismissed the petitioner's appeal against the first order as being time-barred. The petitioner contended that the order under Section 73 was passed without providing an opportunity of hearing, a requirement mandated by Section 75(4) of the GST Act. The counter-affidavit filed by the respondent (State of U.P. and others) did not deny this specific pleading, and the impugned order itself was silent on the grant of a hearing. The Court noted that this issue was previously decided by the same High Court in Writ-Tax No.176 of 2023.

Key Issues

1. Whether the order dated 21.01.2022, passed under Section 73 of the GST Act, is liable to be quashed for non-compliance with the mandatory requirement of providing 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 was passed without affording an opportunity of hearing, violating Section 75(4) of the GST Act. They relied on the judgment of this Court in Writ-Tax No.176 of 2023, which specifically addressed the lack of opportunity of hearing prior to passing an order under Section 73. The petitioner also pointed out that the counter-affidavit did not deny this crucial fact, and the impugned order was silent on the grant of hearing. Respondent's Contention: The judgment records no specific arguments from the respondent's side regarding this issue.