M/S Mittal Plywood And Furniture vs. State Of U P And Another

Held

The Court held that the impugned order dated March 31, 2022, passed under Section 74 of the U.P. GST Act, was in gross breach of the principles of natural justice. The Court found that the rejection of the petitioner's first adjournment application, despite the cause shown not being disbelieved, denied the petitioner a reasonable opportunity to submit their reply and be heard. The Court reasoned that adherence to natural justice is fundamental for valid assessment orders. Consequently, the Court quashed the impugned assessment order. The matter was remitted back to Respondent No. 2 to pass a fresh order in accordance with law, after granting reasonable time to the petitioner to submit their reply and affording them a reasonable opportunity of hearing. No other issues were expressly left undecided.

Facts

The petitioner, M/s Mittal Plywood and Furniture, filed a writ petition challenging an order passed by Respondent No. 2 under Section 74 of the U.P. GST Act and Form GST DRC-07 under Rule 142(5) of the GST Rules, dated March 31, 2022. This order pertained to the tax period July 2017-March 2018 and involved an allegedly unverified transaction of Rs. 2,22,93,327/-. The petitioner received a notice on March 15, 2022, granting 15 days to reply. On March 30, 2022, the petitioner filed their first adjournment application seeking 15 days. Despite the cause shown for adjournment not being disbelieved, the application was rejected, and the impugned order was passed on March 31, 2022.

Key Issues

1. Whether the impugned order dated March 31, 2022, passed under Section 74 of the U.P. GST Act and Rule 142(5) of the GST Rules, is liable to be quashed for gross violation of the principles of natural justice, specifically concerning the rejection of the petitioner's first adjournment application? Petitioner's Contention: The petitioner argued that the impugned order was passed in gross violation of the principles of natural justice. They contended that their first adjournment application, filed on March 30, 2022, seeking 15 days to submit a reply to the notice dated March 15, 2022, was rejected without valid reason, despite the cause shown for adjournment not being disbelieved by the authority. This prevented them from submitting a proper reply and availing a reasonable opportunity of hearing. Respondent's Contention: The judgment records no specific arguments made by the respondent State of U.P. and Another.