M/S Paras Industrial Sales vs. State Of U.P. And Another

Held

The Court held that the assessment order dated 13.09.2022 was illegal and in violation of the principles of natural justice. It found that Section 75(4) of the Act, 2017, mandates an opportunity of hearing when a request is received or when an adverse decision is contemplated. The Court noted that the notice dated 17.12.2021, while mentioning the possibility of personal hearing, stated 'NA' for the date, time, and venue, thus not providing any concrete opportunity. Furthermore, the petitioner had clearly opted for a personal hearing in their reply dated 23.12.2021. The Court rejected the revenue's argument that no further hearing was needed due to non-compliance with the earlier notice, especially when a reply was submitted subsequently. The Court reiterated that a gross violation of the principles of natural justice is an exception to the rule of alternative remedy, justifying the entertainment of a writ petition. The assessment order was set aside, and the matter was remitted back to respondent no.2 for a fresh order after affording the petitioner an opportunity of hearing.

Facts

The petitioner, M/s Paras Industrial Sales, filed a writ petition challenging an assessment order dated 13.09.2022, rectified on the same date, passed by respondent no.2 under Section 74 of the CGST-UPGST Act, 2017. The petitioner contended that despite requesting a personal hearing by ticking the relevant column in their reply dated 23.12.2021 (filed in Form GST DRC 06), no date, time, or venue for the hearing was communicated. The revenue argued that a reminder notice dated 17.12.2021 was issued, and no further personal hearing was required as the petitioner had not submitted a reply to a previous notice dated 27.08.2020. The Court sought instructions from respondent no.2 regarding the non-grant of personal hearing.

Key Issues

1. Whether the assessment order passed by respondent no.2 is illegal for failure to grant an opportunity of personal hearing to the petitioner, as mandated by Section 75(4) of the Act, 2017, despite the petitioner's request and the contemplation of an adverse decision? Petitioner's Arguments: The petitioner argued that they had explicitly opted for a personal hearing in their reply dated 23.12.2021. They relied on the decision in Bharat Mint And Allied Chemicals Vs. Commissioner Commercial Tax and 2 others, which held that an opportunity of personal hearing is mandatory under Section 75(4) of the Act, 2017, especially when an adverse decision is contemplated or requested. They asserted that the denial of personal hearing violated the principles of natural justice and justified entertaining the writ petition despite the availability of an alternative remedy. Revenue's Arguments: The revenue contended that the notice dated 17.12.2021 was a reminder and that no further opportunity for personal hearing was necessary because the petitioner had not responded to an earlier notice dated 27.08.2020.