GST Personal Hearing Fixed before Reply Date is Putting ‘Cart Before Horse’: Uttarakhand HC sets aside Order against Ad Agency [Read Order]

In a recent ruling, the Uttarakhand High Court has set aside a GST ( Goods and Services Tax ) order passed against an Ad agency. It reiterated the observation of the same high court in another case that ‘personal hearing before the last date of reply is putting cart before horse’.

M/s Yashika AD Agency, the petitioner’s allegation is that the department fixed a personal hearing before the last date for submission of the reply. The counsel for the petitioner relied on the case “M/s Modine Thermal Systems Private Limited vs. State of Uttarakhand and others”.

The order of the Uttarakhand HC M/s Modine Thermal Systems Private Limited case is that the petitioner initially issued a notice in Form GST ASMT-10 seeking explanation for discrepancies between outward supplies declared in GSTR-1 and e-way bills for FY 2020 - 21.

After M/s Modine Thermal Systems Private Limited responded, the GST department issued a show cause notice in Form DRC-01 proposing a demand of ₹71.57 lakh with interest.

While the last date for filing a reply to the SCN was fixed as 28 December 2024, the personal hearing was scheduled earlier on 20 December 2024. Modine Thermal Systems sought adjournment of the hearing to a date after submission of its reply. But the request was not accepted and an adverse order passed.

Also Read:GST Appeal filed Beyond 120 Days: Gujarat HC Refuses to Condone 6-Day Delay, says ‘Cannot call Back & Examine OIO’ when Appeal filed [Read Order]

The High court in the Modine Thermal Systems’ case said that “the approach of the Revenue Authority in fixing the personal hearing date before the last date for submission of reply is akin to putting the cart before the horse. The submissions to be made during the personal hearing would necessarily be on the basis of the reply effected.”

The approach of the authorities on insistence of having a personal hearing prior to submitting a reply is contrary to the scheme of the Act also, added the court.

The high court in the above-mentioned case observed that “If the statute stipulates a matter to be performed in a particular manner, the same shall be performed in that manner only. Law in this regard is no more res integra and is well-settled by catena of judgments of the Apex Court.”

Coming to the present case, the Division bench of Chief Justice G. Narendar and Justice Subhash Upadhyay, concurring with the decision and the observations in the Modine Thermal Systems’ case, set aside the GST order and disposed of the petition accordingly.

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