Denial of opportunity of hearing under U.P. GST Act leads to quashing of orders and directs fresh hearings on existing replies

Denial of an opportunity of hearing under the U.P. GST Act was the decisive issue; the court found that where an adverse decision (tax and penalty) was contemplated, the statutory right to be heard was mandatory and orders issued before the scheduled hearing or after a recorded "NO" response were invalid. For the 2020 21 petitions the technical error in marking "NO" did not permit bypassing a hearing, and the orders were set aside. For 2021 22 and 2022 23 the court held the absence of hearing vitiated the orders and quashed them. For 2019 20 the impugned orders were quashed for the same reason and fresh hearings were directed on existing replies.

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Issues involved:
The judgment pertains to four writ petitions challenging orders and show cause notices related to the Financial Years 2019-20, 2020-21, 2021-22, and 2022-23 respectively. The main issue revolves around the violation of the opportunity of hearing as mandated by Section 75(4) of the U.P. GST Act, 2017.

Financial Year 2020-21:
The petitioners challenged orders and show cause notices issued in relation to this financial year. The petitioners had replied to the show cause notice but mistakenly marked "NO" for the opportunity of hearing due to a technical glitch. The counsel argued that Section 75(4) of the U.P. GST Act, 2017 necessitates an opportunity of hearing, which was not provided in this case. The court noted that the orders were passed before the scheduled hearing date, thereby denying the petitioners their right to be heard.

Financial Year 2022-23:
Similar to the previous case, the petitioners contested orders and show cause notices for this financial year. The court emphasized that since both tax and penalty were imposed against the petitioners, an adverse decision was contemplated, requiring an opportunity of hearing as per Section 75(4) of the Act. The court referred to a previous judgment and ruled that marking "NO" for the opportunity of hearing does not authorize the department to proceed without granting a hearing.

Financial Year 2021-22:
The petitioners challenged orders and show cause notices related to this financial year. The court reiterated the mandatory nature of providing an opportunity of hearing under Section 75(4) of the U.P. GST Act, 2017 when an adverse decision is contemplated. Emphasizing the importance of due process, the court held that orders passed without affording the petitioners a hearing are invalid.

Financial Year 2019-20:
In this case, the petitioners contested orders and show cause notices issued for the financial year 2019-20. The court reiterated that the department must grant an opportunity of hearing as per the statutory provision, especially when an adverse decision is anticipated. The court allowed the writ petitions solely on the ground of the lack of opportunity of hearing and quashed the impugned orders.

Conclusion:
The High Court allowed all four writ petitions on the basis of the denial of the opportunity of hearing to the petitioners. The court directed the department to provide a fresh opportunity of hearing based on the replies already submitted by the petitioners and to pass a new order in compliance with the law. Additionally, the court left other issues raised in the writ petitions to be decided at a later stage.

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