Show cause notice violated natural justice by omitting hearing date, place, and time despite Section 75(4) mandate

The Allahabad HC held that despite Section 75(4) of the Act mandating opportunity of hearing, the show cause notice violated natural justice principles by failing to specify date, place, and time for hearing. The court distinguished between opportunity of hearing and personal hearing, noting the legislature's deliberate choice of language. However, applying statutory interpretation principles that all sections must be read together and no provision rendered otiose, the court found the word "personal" was erroneously omitted from the drafting. The matter was remitted to the proper officer to provide personal hearing opportunity and pass fresh orders accordingly. Petition allowed by way of remand.

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Issues Involved:
1. Quashing of the impugned Order passed u/s 74 of the Uttar Pradesh Goods & Service Tax Act, 2017.
2. Quashing of the impugned Show Cause Notice issued u/s 74 of the UPGST Act.

Summary:

Issue 1: Quashing of the impugned Order passed u/s 74 of the Uttar Pradesh Goods & Service Tax Act, 2017.
The petitioner challenged the order dated 19.02.2024 issued in FORM GST DRC-1 and the rectification order dated 27.04.2024 issued in FORM GST DRC-08. The petitioner argued that no audit report was issued despite compliance with audit notices dated 05.05.2022 and 05.01.2023. The show cause notice issued on 07.08.2023 did not provide any date, place, and time of hearing, violating the mandatory procedure and principles of natural justice as per Section 75(4) of the Act. The petitioner cited judgments from Co-ordinate Benches emphasizing the necessity of personal hearing, which was denied in this case.

Issue 2: Quashing of the impugned Show Cause Notice issued u/s 74 of the UPGST Act.
The petitioner argued that the show cause notice violated the settled principles of natural justice by not providing an opportunity for personal hearing, despite a specific request. The court referred to the judgment in Bharat Mint & Allied Chemicals, which emphasized that an opportunity of hearing is mandatory under Section 75(4) of the Act. The court also noted that the availability of an alternative remedy is not a complete bar to entertain a writ petition under Article 226 of the Constitution of India, especially when there is a violation of principles of natural justice.

Court's Analysis:
The court examined the provisions of Sections 73, 74, and 75 of the Act, noting that Section 75(4) mandates an opportunity of hearing where a request is received in writing or where any adverse decision is contemplated. The court emphasized that all sections of a statute must be read together and no section should be rendered otiose. The court concluded that the word "personal" could be construed to have been intended in Section 75(4) and agreed with the Coordinate Bench decisions cited by the petitioner.

Conclusion:
The writ petition was allowed, and the impugned orders dated 19.02.2024 and 27.04.2024 were set aside. The matter was remitted back to the proper officer to provide an opportunity for personal hearing to the petitioner and to pass a fresh order in accordance with statutory provisions.

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