M/S Ramji Kirana Store Thru. Proprietor Ramji vs. State Of U.P. Thru. Addl. Chief Secy. Commercial Tax Deptt. Lucknow And 2 Others

Held

The Court held that the original order dated 20.02.2023, passed under Section 73 of the GST Act, suffered from the vice of not following the mandatory provisions of Section 75(4) of the GST Act, which mandates granting a hearing. The Court found this to be a clear violation of the principles of natural justice. Regarding the appellate order dated 31.07.2023, the Court noted the absence of any application of mind on the delay condonation application filed by the petitioner. Citing the Supreme Court's view in Kajal Dutta v. Assistant Commissioner of State Tax, Suri Charge & Ors., the Court acknowledged that a valuable appellate remedy exists and that the High Court, exercising its jurisdiction under Article 226, can examine factual circumstances. Consequently, the Court quashed both the original order and the appellate order. The matter was remanded to the assessing authority to pass fresh orders after providing the petitioner with an opportunity of hearing. The writ petition was allowed in these terms.

Facts

The petitioner, M/s Ramji Kirana Store, challenged two orders: an order dated 20.02.2023 passed under Section 73 of the GST Act and an appellate order dated 31.07.2023 dismissing their appeal. The petitioner received a notice under Section 73 of the GST Act read with Rule 142(5) of the GST Rules, followed by a reminder notice on 02.10.2022. This reminder notice mentioned a reply submission date of 05.12.2022 but indicated 'NA' for the date, time, and venue of personal hearing. Subsequently, an order was passed on 20.02.2023 without granting any hearing. The petitioner filed an appeal with a delay, depositing 10% of the disputed amount. The delay condonation application was dismissed on 31.07.2023 without apparent application of mind.

Key Issues

1. Whether the order dated 20.02.2023 passed under Section 73 of the GST Act is in violation of the principles of natural justice and the mandatory provisions of Section 75(4) of the GST Act due to the absence of a granted personal hearing? 2. Whether the appellate order dated 31.07.2023, which dismissed the petitioner's appeal due to delay, was passed without proper application of mind, and if the Court can grant relief under Article 226 of the Constitution of India in such circumstances? Petitioner's Arguments: The petitioner argued that the original order under Section 73 was passed in violation of Section 75(4) of the GST Act, as no hearing was granted, evidenced by the 'NA' entries in the reminder notice. They further contended that the appellate order was passed without application of mind. Reliance was placed on the Supreme Court judgment in Kajal Dutta v. Assistant Commissioner of State Tax, Suri Charge & Ors. to argue that the appellate remedy is valuable and the High Court can grant relief under Article 226 even for delay condonation if grounds are justifiable. Respondent's Arguments: The respondent (State) did not record any specific arguments against the petitioner's contentions regarding the lack of hearing or the application of mind in the appellate order.