2024 (4) TMI 415 - HC - GST

Personal Hearing Violation Invalidates Tax Assessment Under Section 75(4), Ensuring Procedural Fairness for Taxpayer's Right to Be Heard

HC allowed the writ petition challenging tax order due to violation of statutory requirement of personal hearing under Section 75(4) of UPGST Act. The ... Violation of principles of natural justice - Order passed without granting any opportunity of Personal hearing to the petitioner - mandatory requirement of the UPGST Act, 2017 - HELD THAT:- This Court in M/s Shree Sai Palace v. State of U.P. and Another [2024 (3) TMI 49 - ALLAHABAD HIGH COURT], relying on two judgments of coordinate Bench of this Court in Bharat Mint and Allied Chemicals v. Commissioner Commercial Tax and Others [2022 (3) TMI 492 - ALLAHABAD HIGH COURT] and M/s Primeone Work Force Pvt. Ltd. v. Union of India, [2024 (1) TMI 625 - ALLAHABAD HIGH COURT] in similar facts and circumstances has held that no orders can be allowed to pass through the legislative barriers of natural justice erected to safeguard individual rights and prevent abuse of power and that the opportunity of hearing is required to be afforded to the petitioner before passing orders. Thus, let there be a writ of certiorari issued against the order dated July 12, 2023 and the order dated August 18, 2022. These orders are quashed and set aside. Consequential relief to follow. The respondent No. 3 is directed 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 six weeks from date. This writ petition is, accordingly, allowed. Issues involved: The issue involves a writ petition under Article 226 of the Constitution of India challenging an order passed by the Additional Commissioner, Grade - 2, regarding the tax period of April, 2021, for non-affording of personal hearing as mandated under Section 75(4) of the Uttar Pradesh Goods and Services Tax Act, 2017.Judgment Summary:Issue 1: Non-affording of Personal HearingUpon perusal of the record and after hearing the counsel for the parties, it was found that the petitioner was not given the opportunity of 'personal hearing,' which is a mandatory requirement under Section 75(4) of the UPGST Act, 2017. The significance of the word 'or' in the section cannot be underestimated as it delineates two distinct scenarios where personal hearing must be provided: either upon application by the individual subject to penalty or tax imposition, or in the event of contemplation of an adverse order. Personal hearing is crucial for procedural fairness and natural justice, ensuring individuals can present their case and respond to allegations. The Court, citing precedents, emphasized that the opportunity of hearing is a legislative barrier to prevent abuse of power and safeguard individual rights. Consequently, a writ of certiorari was issued against the impugned orders, quashing them and directing the respondent to grant the petitioner a personal hearing and pass a reasoned order within six weeks.This judgment underscores the importance of procedural fairness and natural justice in tax and penalty determinations, highlighting the necessity of affording individuals the opportunity for personal hearing as mandated u/s 75(4) of the UPGST Act, 2017.