M/S Primeone Work Force PVT. LTD. Thru. Its Auth. Signatory Alok Kumar vs. Union Of INDIA Thru. Secy. Ministry Of Finance (Deptt. Of Revenue) New Delhi And Others
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The petitioners, M/s Primeone Work Force Pvt. Ltd., filed four writ petitions challenging orders and show cause notices issued by the revenue authorities. The petitions pertain to financial years 2019-20, 2020-21, 2021-22, and 2022-23. The show cause notices, issued in September 2023, proposed imposition of tax and penalty. The dates fixed for hearing in the notices were in September and October 2023. The petitioners submitted their replies on dates prior to the fixed hearing dates. However, they inadvertently marked "NO" for the opportunity of hearing due to a technical glitch or mistake on the portal. The impugned orders were passed on dates between October 9 and October 12, 2023, prior to or on the dates fixed for hearing.
Held
The Court allowed all four writ petitions on the sole ground of denial of an opportunity of hearing. It held that Section 75(4) of the U.P. GST Act, 2017, mandates an opportunity of hearing where an adverse decision is contemplated against a person, which was the case here as both tax and penalty were proposed. The Court found that the petitioners had not been given any opportunity of hearing and that the authorities had not even waited for the scheduled hearing dates before passing the orders. The Court quashed the impugned orders. It directed the department to provide a fresh opportunity of hearing to the petitioners based on their previously submitted replies and to pass a fresh order in accordance with the law. All other questions raised in the writ petitions were expressly left undecided.
Key Issues
1. Whether the impugned orders, passed without granting an opportunity of hearing to the petitioners, are liable to be quashed, in light of Section 75(4) of the U.P. GST Act, 2017? Petitioner's arguments: The petitioners contended that Section 75(4) of the U.P. GST Act, 2017, mandates an opportunity of hearing when an adverse decision is contemplated. They argued that despite submitting replies, they were not granted a hearing, and the orders were passed prematurely, even before the scheduled hearing dates. They relied on the judgment in M/s. Mohini Traders vs. State of U.P. and another, which in turn relied on Bharat Mint & Allied Chemicals Vs. Commissioner, Commercial Tax & others. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or State respondents regarding this issue.
Sections Cited
Section 75(4)
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2024:AHC-LKO:3533-DB Court No. - 2 Case :- WRIT TAX No. - 4 of 2024 Petitioner :- M/S Primeone Work Force Pvt. Ltd. Thru. Its Auth. Signatory Alok Kumar Respondent :- Union Of India Thru. Secy. Ministry Of Finance (Deptt. Of Revenue) New Delhi And Others Counsel for Petitioner :- Neeraj Singh Counsel for Respondent :- A.S.G.I.,Ashwani Kumar Singh,C.S.C.,Dipak Seth ALONG WITH: (1) Case :- WRIT TAX No. - 5 of 2024 Petitioner :- M/S Primeone Work Force Pvt. Ltd. Lko. Thru. Auth. Signatory Alok Kumar Respondent :- Union Of India Thru. Secy. Ministry Of Finance Deptt. Of Revenue , New Delhi And Others Counsel for Petitioner :- Neeraj Singh Counsel for Respondent :- A.S.G.I.,Ashwani Kumar Singh,C.S.C.,Dipak Seth (2) Case :- WRIT TAX No. - 6 of 2024 Petitioner :- M/S Primeone Work Force Pvt. Ltd. Lko. Thru. Auth. Signatory Alok Kumar Respondent :- Union Of India Thru. Secy. Ministry Of Finance (Deptt. Of Revenue) , New Delhi And Others Counsel for Petitioner :- Neeraj Singh Counsel for Respondent :- A.S.G.I.,Ashwani Kumar Singh,C.S.C.,Dipak Seth (3) Case :- WRIT TAX No. - 7 of 2024 Petitioner :- M/S Primeone Work Force Pvt. Ltd. Lko. Thru. Auth. Signatory Alok Kumar Respondent :- Union Of India Thru. The Secy. Ministry Of Finance Deptt. Of Revenue , New Delhi And Others Counsel for Petitioner :- Neeraj Singh Counsel for Respondent :- A.S.G.I.,Ashwani Kumar Singh,C.S.C.,Dipak Seth Hon'ble Vivek Chaudhary,J. Hon'ble Om Prakash Shukla,J.
Heard Sri Avinash Poddar assisted by Sri Neeraj Singh, learned counsel for petitioners, Sri Ashwani Kumar Singh, learned counsel for respondent no.1, learned Standing Counsel
for the State and Sri Dipak Seth, learned counsel for respondent nos.2 and 5 in all the petitions.
These are four writ petitions with regard to Financial Year 2020-21, 2022-23, 2021-22 and 2019-20 respectively. Petitioners have approached this Court challenging the orders dated 09.10.2023, 12.10.2023, 11.10.2023 and 12.10.2023 as well as show cause notices dated 14.9.2023, 14.9.2023, 14.9.2023 and 13.9.2023 issued by respondent no.4 in all four writ petitions respectively.
The said show cause notices were given asking the petitioners to show cause as to why tax and penalty be not imposed upon them. The date fixed in the show cause notice issued to the petitioners was 22.9.2023, 22.9.2023, 13.10.2023 and 13.10.2023 respectively in all four writ petitions. The petitioners had submitted their reply on 21.9.2023, 21.9.2023, 07.10.2023 and 07.10.2023 respectively. However, it appears that by mistake they marked as "NO" for opportunity of hearing. Learned counsel for petitioners submits that the same got marked due to some technical glitch/mistake on the portal.
Be that as it may, learned counsel for petitioners further submits that Section 75(4) of the U.P. GST Act, 2017 mandatorily requires an opportunity of hearing to be given to the petitioners. He further submits that the orders are passed a day prior to the date fixed for hearing. Thus, learned counsel for petitioners states that petitioners have not been given any opportunity of hearing and in fact, the authority did not even wait till the date, for which notice was given to the petitioners. Learned counsel for petitioners further relies upon a judgment dated 3.5.2023 passed by a Division Bench of this Court in Writ Tax No.551 of 2023 "M/s. Mohini Traders vs. State of U.P. and another", which again relies upon a judgment of this Court in Bharat Mint & Allied Chemicals Vs. Commissioner, Commercial Tax & others (2022) 48 VLJ 325. 5. Section 75(4) of the U.P. GST Act, 2017 reads as under: "An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person."
Section 75(4) of the Act of 2017 specifically states 'or where any adverse decision is contemplated against such person'.
Since in the present cases, both tax and penalty are imposed against the petitioners and admittedly, an adverse decision is contemplated against the petitioners, therefore, under Section 75(4) of the Act of 2017, an opportunity of hearing was mandatorily required to be given by the department to the petitioners and merely marking the same as "NO" in the option cannot entitle the department to pass an order without giving any opportunity or even without waiting for the petitioners to appear on the date fixed. This Court has already taken a similar view in M/s. Mohini Traders (supra).
In view thereof, all the writ petitions are allowed on the sole ground of opportunity of hearing and the orders impugned in all four writ petitions are quashed.
It shall be open for the department to give a fresh opportunity of hearing to the petitioners on the reply already submitted by the petitioners to the show cause notice and pass a fresh order in accordance with law. The petitioners shall fully cooperate in expeditious disposal of the case.
All other questions raised in the writ petitions are left open to be decided at the appropriate stage. [Om Prakash Shukla,J.] [Vivek Chaudhary,J.] Order Date :- 12.1.2024 Sachin SACHIN MEHROTRA High Court of Judicature at Allahabad, Lucknow Bench
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.