Opportunity of Personal Hearing under UPGST Act denied; court quashed orders and directed fresh hearing with reasoned decision.

Whether a taxpayer was denied an opportunity of personal hearing under the UPGST Act: the court read Section 75(4) as mandating a personal hearing either on request or when an adverse decision is contemplated, and found none was afforded; consequence - impugned assessment order quashed. Whether principles of natural justice were violated: relying on precedent emphasizing hearing before civil consequences, the court found a breach by both the assessing authority and the appellate authority; consequence - appellate order set aside for failure to cure the defect. Whether a writ was maintainable despite an alternative remedy: gross breach of natural justice made writ relief permissible; consequence - writ allowed and remand ordered for fresh hearing and reasoned decision.

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Issues Involved:
1. Whether the petitioner was denied an opportunity of personal hearing as mandated under Section 75(4) of the UPGST Act, 2017.
2. Whether the orders passed by the Respondent No. 3 and upheld by the Respondent No. 2 violated principles of natural justice.
3. Whether the writ petition is maintainable despite the availability of an alternative remedy under Section 107 of the UPGST Act, 2017.

Summary:

Issue 1: Opportunity of Personal Hearing
The petitioner, M/S K.J. Enterprises, contended that they were not afforded an opportunity of personal hearing, which is a mandatory requirement under Section 75(4) of the UPGST Act, 2017. The court emphasized that the statutory language of Section 75(4) clearly mandates that an opportunity of hearing must be granted either upon request by the person chargeable with tax or penalty or when an adverse decision is contemplated against such person. The court underscored the disjunctive nature of the word "or" in the statute, which provides flexibility and choice, ensuring that personal hearing is a fundamental aspect of procedural fairness and natural justice.

Issue 2: Violation of Principles of Natural Justice
The court referred to multiple precedents, including Bharat Mint and Allied Chemicals v. Commissioner Commercial Tax and Others, and Mohini Traders v. State of U.P. and Others, which reiterated the necessity of providing an opportunity for personal hearing as contemplated under Section 75(4) of the UPGST Act, 2017. The court also cited the Supreme Court's decision in Dharampal Satyapal Limited v. Deputy Commissioner of Central Excise, Guhati and Others, which upheld the importance of personal hearing before making any decision that may result in civil consequences. The court found that the Respondent No. 3 did not afford the petitioner an opportunity of personal hearing before passing the order dated August 10, 2021, and the Respondent No. 2 failed to correct this impropriety while dismissing the appeal.

Issue 3: Maintainability of the Writ Petition
The court addressed the respondents' argument that the writ petition was not maintainable due to the availability of an alternative remedy under Section 107 of the UPGST Act, 2017. The court held that the availability of an alternative remedy is not a complete bar to entertaining a writ petition under Article 226 of the Constitution of India, especially when there is a gross violation of principles of natural justice. The court found that the impugned orders were passed without affording the petitioner an opportunity of personal hearing, thus violating the principles of natural justice.

Conclusion:
The court issued a writ of certiorari quashing the orders dated August 10, 2021, passed by the Respondent No. 3, and September 26, 2022, passed by the Respondent No. 2. The court directed the Respondent No. 2 to grant an opportunity of personal hearing to the petitioner and thereafter pass a reasoned order in accordance with the law within a period of two months. The writ petition was allowed.

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