M/S Prabhakar Nath Tiwari Thru. Sole Proprietor Prabhakar Nath Tiwari And Another vs. State Of U.P. Thru.Addl. Chief Secy. Deptt. Of State Tax Civil Sectt. Lko And 2 Others

Facts

The petitioner, M/s Prabhakar Nath Tiwari, through its sole proprietor Prabhakar Nath Tiwari, filed a writ petition challenging a GST demand order dated August 3, 2024, for approximately Rs. 92 Lakhs. The petitioner contended that the demand order was passed without adhering to the mandatory provisions of Section 75(4) of the U.P. GST Act, 2017, which mandates providing a notice or an opportunity of hearing before passing such an order. The respondent, the State of U.P. through its Additional Chief Secretary, Department of State Tax, and two others, was represented by counsel. The tax period for the demand is not explicitly stated in the judgment. The impugned order was passed by the revenue authorities.

Held

The Court held that the GST demand order dated August 3, 2024, was passed in violation of the mandatory provisions of Section 75(4) of the U.P. GST Act, 2017. The reasoning was based on the admitted position by the State's counsel that no opportunity of hearing was provided to the petitioner before passing the impugned order. The Court found this to be a non-compliance with the statutory requirement. The ratio decidendi is that a demand order passed without affording the statutory opportunity of hearing is unsustainable in law. Consequently, the Court quashed the impugned demand order dated August 3, 2024. However, the Court granted liberty to the opposite party (revenue) to proceed afresh as per law, if required. No issue was expressly left undecided.

Key Issues

1. Whether the GST demand order dated August 3, 2024, is liable to be quashed for non-compliance with the mandatory provisions of Section 75(4) of the U.P. GST Act, 2017, which requires an opportunity of hearing prior to passing an order? Petitioner's Contention: The petitioner argued that the demand order was passed in violation of Section 75(4) of the U.P. GST Act, 2017, as no prior notice or opportunity of hearing was provided. Respondent's Contention: The learned counsel for the State fairly conceded that no opportunity of hearing had been given to the petitioner.