M/S Brijesh Kumar Singh Thru. Its Partner Brijesh Kumar Singh vs. State Of U.P. Thru. Prin. Secy. Institutional Finance Govt. Lko. And Another

Held

The Court held that Section 75(4) of the U.P. GST Act, 2017, mandates an opportunity of hearing when an adverse decision is contemplated against a person chargeable with tax or penalty. The Court agreed with the principle laid down in Bharat Mint & Allied Chemicals, stating that an assessee is not required to explicitly request a personal hearing; it is mandatory for the Assessing Authority to afford such an opportunity before passing an adverse order. The fact that the petitioner may have signified 'No' or that the notice indicated 'NA' for personal hearing details bears no legal consequence. The Court emphasized that in the context of an assessment order creating a significant civil liability, a minimal opportunity of hearing is essential to uphold the principles of natural justice. Such an opportunity allows the authority to pass a reasoned order and ensures better appreciation at subsequent stages. Consequently, the impugned order was set aside, and the matter was remitted to the Deputy Commissioner for issuing a fresh notice and concluding proceedings expeditiously.

Facts

The petitioner, M/s Brijesh Kumar Singh, through its partner Brijesh Kumar Singh, challenged an order dated 06.12.2022 passed by the Deputy Commissioner, State Tax, Sector-1, Raebareli. This order raised a demand exceeding Rs. 27,23,636/- for the tax period 2018-19. The petitioner's primary contention was that the only notice issued on 28.09.2022, seeking a reply within 30 days, indicated "NA" against the columns for "Date of personal hearing," "Time of personal hearing," and "Venue where personal hearing will be held." This, the petitioner argued, amounted to a complete denial of an oral hearing before the Assessing Authority.

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, as contemplated under Section 75(4) of the U.P. GST Act, 2017, despite the petitioner's notice indicating 'NA' for personal hearing details? The petitioner argued that Section 75(4) mandates an opportunity of hearing when an adverse decision is contemplated, and the Assessing Authority was bound to provide this opportunity, irrespective of the petitioner's choice or lack thereof in the notice. 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 revenue's arguments were not recorded in the judgment.