M/S Payrelal Galar vs. The State Of Madhya Pradesh

Held

The Court held that the impugned order dated 06.06.2022 was not sustainable. The show cause notice itself indicated an intention to grant a personal hearing as required by law. However, the notice failed to specify the date, time, and venue for the hearing, with 'NA' mentioned in the relevant columns. This demonstrated that no personal hearing was afforded to the petitioner. The Court reiterated that where an adverse decision is contemplated, an opportunity of personal hearing is mandatory under Section 75(4) of the Act, and the person chargeable need not even request it. The Court also held that the availability of an alternative remedy of appeal does not preclude interference under Article 226 when principles of natural justice, such as the right to a hearing, have been violated. Following the precedent set by the Allahabad High Court in Bharat Mint & Allied Chemicals, the Court quashed the impugned order and remitted the matter back to the Assistant Commissioner for fresh adjudication after providing the petitioner with a personal hearing.

Facts

The petitioner, M/s Payrelal Galar, challenged an order dated 06.06.2022 passed by the Assistant Commissioner of State Tax, Hoshangabad, under Section 74 of the MPSGST/CGST Act, 2017. This order upheld the tax, interest, and penalty proposed in a show cause notice dated 28.12.2021. The petitioner argued that the show cause notice mentioned a personal hearing but failed to provide a specific date, time, and venue. Consequently, no personal hearing was granted before the impugned order was passed. The respondents supported the impugned order but could not justify the lack of personal hearing. They contended that an alternative remedy of appeal was available.

Key Issues

1. Whether an opportunity of personal hearing is mandatory under Section 75(4) of the CGST/MPSGST Act, 2017, when an adverse decision is contemplated against a person, even if no specific request for hearing is made? 2. Whether the impugned order dated 06.06.2022, passed without affording a personal hearing, is sustainable in light of the principles of natural justice and the provisions of Section 75(4) of the Act? Petitioner's Arguments: The petitioner contended that the show cause notice indicated an intention to provide a personal hearing, as required by Section 75(4) of the Act. However, the absence of a specified date, time, and venue in the notice meant that no personal hearing was actually granted. This breach of natural justice renders the impugned order unsustainable. The petitioner relied on the Allahabad High Court's decision in Bharat Mint & Allied Chemicals Vs. Commissioner of Commercial Tax. Respondents' Arguments: The respondents supported the impugned order but failed to justify the non-affording of personal hearing. They argued that the petitioner had an alternative remedy of appeal, and therefore, the High Court should not interfere under Article 226 of the Constitution.