The Allahabad High Court has held that not filing a reply to a show cause notice does not take away the opportunity for a personal hearing mandated under Section 75(4) of the Uttar Pradesh Goods and Service Tax Act, 2017.
Brief Facts:
The first notice issued to the petitioner under Section 73 of the Act dated 29.09.2023 did intend to call for a reply from the petitioner but did not propose to grant personal hearing as the abbreviation "NA" was specified against the column "date of personal hearing". A similar narration appears in the further notice issued to the petitioner dated 28.11.2023. In that against the columns to specify the date of personal hearing, time of personal hearing and venue for personal hearing, the abbreviation "NA" i.e. Not Applicable were recorded.
Contentions of the Petitioner:
The learned counsel appearing on behalf of the petitioner submitted that a detailed reply was not required. The discrepancies in the returns as noticed by the adjudicating authority would have been clarified if the opportunity for a personal hearing had been granted.
Observations of the court:
The Court noted that in view of the admitted position on record, the only conclusion possible to be drawn is that the petitioner was never afforded any opportunity for a personal hearing and thus, upon service of notice the petitioner had been called to file its reply only and non-compliance of that show cause notice may have only led to the closure of opportunity to submit a 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 in the oral hearing and establish at that stage itself that the adverse conclusions proposed to be drawn against the petitioner, may be dropped.
Further, the court stated that the rules of natural justice as are ingrained in the statute prescribe dual requirements. First with respect to submission of written reply and the second with respect to oral hearing. Failure to avail of one opportunity may not lead to denial of the other. The two tests have to be satisfied independently.
It was concluded by the court that the order impugned has been passed contrary to the mandatory procedure and the deficiency of procedure is self-apparent and critical to the outcome of the proceedings.
The decision of the Court:
The court allowed the petition and set aside the impugned order.
Case Title: Ms Atlas Cycles Haryana Ltd vs. State of U.P. and Anr.
Coram: Hon’ble Mrs. Justice Saumitra Dayal Singh and Hon’ble Mr. Justice Manjive Shukla
Case No.: WRIT TAX No. - 144 of 2024
Advocate for the Petitioner: Mr. Shubham Agrawal
Advocate for the Respondent: C.S.C.
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