Procedural Violation: GST Authority Fails to Provide Mandatory Personal Hearing Under Section 74 and 75(4), Order Quashed

HC found that the GST authority violated procedural requirements by issuing an order under Section 74 without granting the petitioner a mandatory personal hearing as specified in Section 75(4). The court quashed the original order dated 01.10.2020, allowing the respondents to proceed in accordance with legal procedures while ensuring proper hearing rights are observed.

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Issues involved:
The issues involve the legality of orders passed against the petitioner u/s 74 of the U.P. GST Act without granting an opportunity of hearing as mandated by Section 75(4) of the Act.

Issue 1 - Opportunity of Hearing:
The petitioner contended that no opportunity of hearing was granted before passing the order against him u/s 74 of the U.P. GST Act. The petitioner relied on Section 75(4) which mandates granting an opportunity of hearing where an adverse decision is contemplated, even if no specific request is made. Citing a previous judgment, the petitioner argued that personal hearing is mandatory before passing an adverse order. The Standing Counsel failed to show any evidence of a date fixed for hearing in the order sheet, which is a mandatory condition u/s 75(4). The order dated 01.10.2020 did not indicate any personal hearing being accorded to the petitioner, thus leading to the conclusion that the petitioner was denied a mandatory personal hearing. Consequently, the order dated 01.10.2020 was quashed, allowing the respondents to proceed in accordance with the law.

Issue 2 - Appeal Dismissal:
The petitioner's appeal against the order dated 01.10.2020 was dismissed for failure to deposit the required amount. The Court noted that while the appeal conditions are statutory, the dismissal without consideration does not trigger the doctrine of merger. As the appeal was dismissed due to non-compliance with the deposit condition, the Court found no fault with the order dated 28.11.2020. However, since the appeal was dismissed without consideration, the order dated 01.10.2020 was not deemed to have merged with the later order. Given the challenge to the order dated 01.10.2020, the Court decided to consider it on its merits. Writ Petition No. 408 of 2023 was also allowed, quashing the impugned order dated 22.10.2021 on similar grounds as the first petition.

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