2023 (9) TMI 48 - HC - GST

GST Demand Order Quashed Due to Lack of Personal Hearing, Upholding Principles of Natural Justice Under Section 74

Party Time Hospitality Prop. Smt. Punita Gupta Lko. Versus State Of U.P. Thru Prin. Secy. Tax And Registration Lko And 2 Others

HC allowed the petitioner's writ challenging a GST demand order under Section 74. The court found procedural irregularities, specifically the lack of a ... Maintainability of appeal - appeal filed beyond the prescribed period of limitation - Court interfered mainly on the ground that it was incumbent to grant an opportunity of hearing irrespective whether a reply was filed or not in terms of the mandate of Section 75(4) of GST Act - principles of natural justice - HELD THAT:- Considering the submissions made at the Bar, from the order of assessment passed in pursuance to show-cause notice issued under Section 74 of GST Act, admittedly, no hearing has been accorded to the petitioner, which is contrary to the mandate of law prescribed under Section 75(4) of GST Act; as an expropriatory action, even otherwise, the principles of natural justice had to be complied with. Matter is remanded to the respondents to pass orders afresh in accordance with law after giving an opportunity of hearing - Petition allowed by way of remand. Issues Involved:The judgment deals with a challenge to an order confirming a demand under Section 74 of the GST Act and the dismissal of an appeal on grounds of limitation.Challenge to Order under Section 74 of GST Act:The petitioner challenged an order confirming a demand against them under Section 74 of the GST Act. The petitioner argued that they had leased a party lawn and were not involved in its affairs before a certain date. The show-cause notice lacked details on invoking Section 74, including the absence of a date for personal hearing. The petitioner did not respond to the notice, leading to the order quantifying the tax demand and penalty for a specific period. The petitioner contended that the summary of the notice did not specify the alleged fraud or misstatement. The appeal against the order was dismissed due to being beyond the prescribed limitation period under Section 107 of the GST Act. The petitioner relied on previous judgments emphasizing the importance of granting a hearing as per the mandate of Section 75(4) of the GST Act.Court's Analysis and Decision:The court noted that no hearing was provided to the petitioner as required under Section 75(4) of the GST Act. The court referenced previous judgments, including one where a similar assessment order was interfered with due to the lack of a hearing. Considering the principles of natural justice and the legal mandate, the court set aside the impugned orders and remanded the matter to the respondents for fresh orders after granting a proper opportunity of hearing. The writ petition was allowed, and the original record was returned to the respondent's counsel.This summary provides a detailed breakdown of the issues involved in the judgment and the court's analysis and decision regarding the challenge to the order under Section 74 of the GST Act.