M/S Lucknow City Transport Services LTD. , Lko. Thru. Its Managing Director Ataur Rahman vs. State Of U.P. Thru. Prin. Secy. (Institutional Finance) U.P. Govt. Lko. And Another

Held

The Court held that the petitioner's plea regarding the denial of an opportunity of hearing and violation of the principles of natural justice could not be countenanced. While acknowledging the importance of personal hearing, the Court noted that the petitioner did not reply to the show cause notice and did not heed the fresh date fixed for the hearing. The petitioner did not pray for an extension of time to submit their reply, and their oral assertion of not knowing the hearing date was not supported by pleadings in the writ petition. Relying on its own judgment in Writ Tax No. 114 of 2024 (Eveready Industries India Ltd vs. State of U.P. and another), the Court opined that even if no specific date, time, or place of hearing was indicated in the notice under Section 73, it was the assessee's duty to file a reply to the show cause notice. By choosing to ignore the notice, the petitioner forfeited their right to claim a violation of natural justice. The Court also noted the statutory remedy available under Section 107 of the Central GST Act. Therefore, the writ petition was dismissed.

Facts

The petitioner, M/s Lucknow City Transport Services Ltd., filed a writ petition challenging an ex-parte demand order dated December 16, 2023, and a show cause notice dated September 21, 2023, issued by the Deputy Commissioner, Sector 7, Lucknow, under Section 73 of the State Goods & Service Tax Act. The show cause notice demanded Rs 1,47,63,816.57 for the period July 2017-March 2018. The petitioner claimed they requested time for adjournment, but the impugned order was issued without their knowledge. The respondent-State contended that a notice under Section 61 was initially issued, followed by a notice under Section 73(1) read with Rule 142(1) on September 21, 2023, which was served on the same day. An adjourned application was uploaded by the petitioner, and a hearing was fixed for November 17, 2023, via the department's portal. The petitioner did not submit a reply or appear. The petitioner orally claimed no knowledge of the November 10, 2023, order fixing the hearing date.

Key Issues

1. Whether the ex-parte demand order dated December 16, 2023, issued by the Deputy Commissioner, Sector 7, Lucknow, is liable to be quashed for violation of the principles of natural justice, specifically the denial of a personal hearing as contemplated under Section 75(4) of the U.P. GST Act? Petitioner's Arguments: The petitioner argued that they were denied a personal hearing, and the impugned order was passed ex-parte without proper intimation, relying on previous judgments of this Court in similar matters, including Writ Tax No. 198 of 2023 (M/S Brijesh Kumar Singh vs. State Of U.P.) and cases like Bharat Mint And Allied Chemicals and Mahaveer Trading Company. They also referred to a general mandamus issued by a coordinate bench and a circular from the Commissioner, Commercial Tax, emphasizing the need to follow Section 75(4). Respondent's Arguments: The State-respondent contended that a show cause notice under Section 73(1) read with Rule 142(1) was issued and served on September 21, 2023. They stated that the petitioner uploaded an adjourned application, and a hearing date of November 17, 2023, was fixed and uploaded on the portal. The petitioner neither submitted a reply nor appeared, leading to the ex-parte order under Section 73(9). The State also pointed to the petitioner's failure to make any such pleading in the writ petition regarding the lack of knowledge of the hearing date.