M/S Raghunandan Iron And Steel Co vs. State Of Punjab And Another

Held

The Court held that the impugned orders dated 27.05.2021 (Annexure P-5 and P-6) were liable to be set aside because the mandatory requirement of granting a personal hearing, as stipulated in Section 75(4) of the Punjab GST Act, 2017, was not complied with. The Court noted the fair concession made by the learned Additional Advocate General for the respondents, acknowledging the existence of the provision and the fact that the petitioner's request for a personal hearing was not granted. The reasoning was based on the direct violation of a statutory procedural requirement. The ratio decidendi is that orders passed in violation of mandatory procedural provisions, such as the right to a personal hearing, are unsustainable. The Court directed respondent No.2 to pass a fresh order after providing the petitioner with an opportunity for a hearing. The petitioner was directed to appear before the respondent on 09.08.2021 or any other date fixed by the respondent.

Facts

The petitioner, M/s Raghunandan Iron & Steel Company, filed a writ petition challenging an order dated 27.05.2021 (Annexure P-5) in Form GST DRC-07 and a summary of order dated 27.05.2021 (Annexure P-6), both passed by respondent No.2. The petitioner's primary contention was that despite a statutory mandate for a personal hearing upon demand, as stipulated in Section 75(4) of the Punjab GST Act, 2017, no such hearing was granted. The respondents, represented by the State of Punjab, through the Additional Advocate General, fairly conceded that the provision exists and that the petitioner had indeed requested a personal hearing which was not provided.

Key Issues

1. Whether the impugned orders dated 27.05.2021 (Annexure P-5 and P-6) are liable to be quashed on the ground that a personal hearing, as mandated by Section 75(4) of the Punjab GST Act, 2017, was not afforded to the petitioner despite a request being made? The petitioner argued that Section 75(4) of the Punjab GST Act, 2017, explicitly requires a personal hearing to be granted if requested by the taxpayer. The failure to provide this hearing renders the subsequent orders illegal and void. The petitioner relied on the statutory provision itself. The respondents, through the Additional Advocate General, conceded that Section 75(4) of the Punjab GST Act, 2017, mandates a personal hearing if demanded and admitted that the petitioner had requested such a hearing, which was not granted. Therefore, the respondents did not contest the petitioner's claim on this ground.