M/S Jps Buildtech Private Limited vs. State Of U.P. And Another

Held

The Court held that the Assessing Authority was indeed bound to afford an opportunity of personal hearing to the petitioner before passing an adverse assessment order, as mandated by Section 75(4) of the U.P. GST Act, 2017. The Court agreed with the coordinate bench's interpretation in *Bharat Mint & Allied Chemicals*, stating that an assessee is not required to explicitly request a personal hearing when an adverse decision is contemplated. The fact that the petitioner may have indicated 'No' to availing a personal hearing in the notice response had no legal consequence. The Court emphasized that observing a minimal opportunity of hearing is a must, especially when a heavy civil liability is created, and this is a requirement of the principles of natural justice. The impugned order was set aside because the opportunity of hearing was not granted in real terms, and the order was passed shortly after the reply was entertained. The Court directed the Deputy Commissioner to issue a fresh notice to the petitioner, who undertook to appear, for the expeditious conclusion of proceedings.

Facts

The petitioner, M/s Jps Buildtech Private Limited, challenged an order dated 18.08.2023 passed by the Deputy Commissioner, State Tax, Sector-9, Meerut. This order raised a demand exceeding Rs. 54,76,018/- against the petitioner for the tax period 2020 to 2021. The petitioner's primary contention was that the only notice issued sought a reply by 14.08.2023, and the Assessing Authority failed to provide an opportunity for a personal hearing before passing an adverse order, despite the significant demand raised. The petitioner relied on Section 75(4) of the U.P. GST Act, 2017, and judicial precedents to support their claim.

Key Issues

1. Whether the Assessing Authority was bound to afford an opportunity of personal hearing to the petitioner before passing an adverse assessment order, in light of Section 75(4) of the U.P. GST Act, 2017, notwithstanding the petitioner's response to the notice. Petitioner's arguments: The petitioner argued that Section 75(4) mandates an opportunity of hearing when an adverse decision is contemplated, and this obligation does not require the assessee to explicitly request it. They relied on the interpretation of Section 75(4) by a coordinate bench of the High Court in *Bharat Mint & Allied Chemicals Vs. Commissioner Commerical Tax & 2 Ors.* and a Gujarat High Court decision in *M/S Hitech Sweet Water Technologies Pvt. Ltd. Vs. State of Gujarat*. The adverse order creating a demand of approximately Rs. 26 Lacs (tax and penalty) was contrary to law due to the absence of a hearing. Respondent's arguments: The judgment records no specific arguments from the respondent State.