LI Network
Published on: February 7, 2024 at 13:28 IST
The Allahabad High Court, in a recent ruling, affirmed that under the Uttar Pradesh Goods and Service Tax Act 2017 (UPGST Act), individuals must be given an opportunity for a hearing before any adverse decision is made, even if there is no formal request on their part.
Justice Shekhar B. Saraf underscored the importance of providing a chance for a personal hearing, stating that the term ‘or’ in Section 75(4) of the UPGST Act denotes two distinct scenarios mandating the grant of such an opportunity.
Section 75(4) of the UPGST Act specifies that an opportunity for a hearing must be granted upon a written request or when contemplating adverse action against an individual.
The Court emphasized the disjunctive nature of the term ‘or,’ indicating the deliberate inclusion of two separate situations requiring a personal hearing.
In a case involving a petitioner who was denied the opportunity for a personal hearing under Section 75(4), the court held that the absence of such an opportunity rendered the penalty order and the appellate authority’s decision invalid.
The court referred to previous decisions, including Bharat Mint and Allied Chemicals v. Commissioner Commercial Tax, Mohini Traders v. State of U.P., and M/s Primeone Work Force Pvt. Ltd. v. Union of India, which established the mandatory nature of a hearing before an adverse order is issued.
Citing the Supreme Court’s ruling in Dharampal Satyapal Limited v. Deputy Commissioner of Central Excise, Guwahati, the court reiterated that providing an opportunity for a hearing is essential before taking administrative action with civil consequences.
The Court ultimately quashed both the penalty order and the decision of the appellate authority due to the oversight in not granting the petitioner a personal hearing under Section 75(4) of the UPGST Act.
The case title is M/s K.J. Enterprises v. State of U.P. and others [Writ Tax No. 1544 of 2022].