The Allahabad High Court in the case M/S B L Pahariya Medical Store v. State of U.P. and Another observed and has held that it being mandatory for the Assessing Authority in order to provide an opportunity of personal hearing to the Assessee before any adverse order is passed against him.
The bench comprising of Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava in the case observed and has held that not only such opportunity would ensure observance of rules of natural of justice but it would allow the authority for passing appropriate and reasoned order as may serve the interest of justice and allow for the better appreciation to arise at the next or the appeal stage. Therefore, the Deputy Commissioner, State Tax, Sector-1, Karvi raised a demand in excess for an amount of Rs. 26 Lacs for the tax period July 2017 to March 2018.
The petitioner in the plea challenged the demand order on the ground that the only 15 days’ time was given to file a reply and no opportunity of personal hearing was being provided to the Petitioner before the demand was raised.
The petitioner in the case also relied on Section 75(4) of the U.P. GST Act, 2017, wherein the court makes it mandatory on the Authority to provide an opportunity for hearing before any adverse order is being passed against an assessee. The court placed the Reliance on decision of the Allahabad High Court in the case Bharat Mint and Allied Chemicals v. Commissioner Commercial Tax & 2 Ors.
It has also been held by the petitioner in the case that while marking ‘no’ in column to avail personal hearing, the same would be of no consequence as it is mandatory upon the authority to provide an opportunity for personal hearing.
It has also been held by the said court that such minimal opportunity of hearing is a must and the principle of natural justice would commend to this Court to bind the authorities to always ensure to provide such opportunity of hearing.
Further, the court stated that it has to be ensured that such opportunity is being granted in real terms.
It has been noted by the said court that the impugned order itself has been passed on 21.03.2023, while reply to the show-cause- notice had been entertained on December 30, 2022. However, the stand taken by the assessee may remain unclear unless minimal opportunity of hearing is granted first. Thus, the explanation furnished may be rejected and the demand created.
Accordingly, the court allowed the writ petition and court issued the fresh notice to the petitioner.
