2025 (11) TMI 480 - HC - GST

Denial of oral hearing after show-cause notice breaches natural justice; Section 75 preserves oral hearing; matter remitted.

M/s A To Z Car Solutions Versus State Of U.P. And 2 Others

The HC found a breach of natural justice where the petitioner was denied an oral hearing despite service of a show-cause notice and only being allowed to ... Violation of principles of natural justice - petitioner was never afforded any opportunity of personal hearing - HELD THAT:- Uon service of notice, the petitioner had been called to file its reply only. Consequently, non-compliance of that show cause notice may have only led to closure of opportunity to submit written reply. However by virtue of the express provision of Section 75 of the Act, even in that situation the petitioner did not lose its right to participate at oral hearing and establish at that stage itself that the adverse conclusions proposed to be drawn against the petitioner, may be dropped - the rules of natural justice as are ingrained in the statute prescribe dual requirement. First with respect to submission of written reply and the second with respect to oral hearing. Failure to avail one opportunity may not lead to denial of the other. The two tests have to be satisfied independently. Thus, no useful purpose may be served in keeping this petition pending or calling counter affidavit at this stage or to relegate the present petitioner to the forum of alternative remedy. The order impugned has been passed contrary to the mandatory procedure. The deficiency of procedure is self apparent and critical to the out-come of the proceedings. The impugned order dated February 6, 2025 is set aside. Matter is remitted to the respondent No.2 to pass a fresh order - Petition allowed by way of remand. As per Section 75(4) of the U.P. G.S.T. Act, 2017, 'opportunity of personal hearing has to be granted before any adverse decision is taken' against a registered person. A notice under Section 73(1) and a reminder dated January 30, 2025 called for a written reply but recorded 'NA' against date, time and venue for personal hearing, resulting in no opportunity for oral hearing. The court held that the statute embodies a 'dual requirement' - written reply and oral hearing - and failure to avail one does not extinguish the right to the other; both tests must be satisfied independently. The impugned order dated February 6, 2025 was passed contrary to mandatory procedure and is set aside. Matter is remitted to respondent No.2 to pass a fresh, reasoned order after permitting the petitioner to file its final reply within two weeks and to appear on a fixed personal hearing date. The writ petition is allowed.