M/S Shri Shyam Engineers Solution vs. The State Of Uttarakhand

Facts

The petitioner, M/s Shri Shyam Engineers Solution, challenged an order dated 20.12.2025 passed by the Assistant Commissioner, State Tax, Sector-01, Rudrapur, Uttarakhand. This order demanded tax of Rs.1,24,497/-, interest of Rs.82,209/-, and penalty of Rs.20,000/-, totaling Rs.2,26,706/-. The petitioner contended that a show cause notice issued on 13.08.2025 granted time to reply by 13.09.2025 but fixed the personal hearing for 21.08.2025, which was prior to the reply submission date. This procedural irregularity was the basis of the challenge.

Held

The Court held that the procedure adopted by the respondent authority, by fixing the date of personal hearing prior to the date fixed for submission of the petitioner's reply to the show cause notice, was illegal and in breach of the principles of natural justice. The Court relied on the contention of the petitioner and the concession made by the State counsel. The Court referred to Section 75 of the Act, which deals with procedural aspects, and the judgment in "M/s Modine Thermal Systems Pvt. Ltd. vs. State of Uttarakhand & others" to support its finding that the statutory scheme was not followed. Consequently, the impugned order of assessment could not be sustained. The Court quashed the order and remitted the matter back to the Assessing Officer to proceed from the stage of the show cause notice, grant the petitioner an opportunity to file its reply, and thereafter fix a fresh date for personal hearing. No issue was expressly left undecided.

Key Issues

1. Whether the procedure adopted by the respondent authority, fixing the date of personal hearing prior to the date fixed for submission of reply to the show cause notice, is illegal and in breach of the principles of natural justice, thereby vitiating the impugned order under Section 73(9) of the CGST/UKGST Act? The petitioner argued that the procedure was wholly illegal because the date of personal hearing could not be fixed before the date granted for submitting a reply. They relied on a judgment of a Coordinate Bench in "M/s Modine Thermal Systems Pvt. Ltd. vs. State of Uttarakhand & others" (Writ Petition (M/B) No.123 of 2025), which held that the approach adopted by the authority was contrary to the scheme of the Act, particularly Sections 73, 74, and 75, and that if a statute stipulates a matter to be performed in a particular manner, it must be performed only in that manner. The State counsel conceded that since the date of personal hearing was fixed prior to the date of submission of reply, the personal hearing was not effective and resulted in a breach of natural justice.