In a significant ruling, the Allahabad High Court held that the hearing is mandatory for the adverse decisions under Section 75 of Uttar Pradesh Goods and Services Tax ( UP GST ) irrespective of ‘NO’ click on the personal hearing request by the GST department.
The bench of Justice Om Prakash Shukla and Justice Vivek Chaudhary observed that “an opportunity of hearing was mandatorily required to be given by the department to the petitioners and merely marking the same as “NO” in the option cannot entitle the department to pass an order without giving any opportunity or even without waiting for the petitioners to appear on the date fixed.”
A total of 4 writ petitions were filed with regards to the Financial year 2020-21, 2022-23, 2021-22 and 2019-20 respectively. Petitioners have approached this Court challenging the orders as well as show cause notices issued by the GST department in all four writ petitions respectively.
The said show cause notices were given asking the petitioners to show cause as to why tax and penalty be not imposed upon them. The petitioners had submitted their reply on 21.9.2023, 21.9.2023, 07.10.2023 and 07.10.2023 respectively. However, it appears that by mistake they marked as “NO” for the opportunity of hearing.
The counsel for the petitioners submitted that the same got marked due to some technical glitch/mistake on the portal. He further submitted that the orders are passed a day prior to the date fixed for hearing. Thus, the counsel for the petitioners stated that the petitioners have not been given any opportunity of hearing and in fact, the authority did not even wait till the date, for which notice was given to the petitioners.
The Section 75 of UP GST Act states that “An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.”
As the current instances involved the imposition of both tax and penalties on the petitioners, and it was acknowledged that an unfavourable decision is anticipated for them, it is imperative, in accordance with Section 75(4) of the UP GST Act, that the department provides the petitioners with a mandatory opportunity for a hearing.
In view thereof, the high court allowed all the writ petitions on the sole ground of opportunity of hearing and the orders impugned in all four writ petitions were quashed. Also stated that it shall be open for the department to give a fresh opportunity of hearing to the petitioners on the reply already submitted by the petitioners to the show cause notice and pass a fresh order in accordance with law.
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