GAURAV ENTERPRIZES V. STATE OF UP

The case at hand revolves around the interpretation of Section 75(4) of the U.P. GST Act, 2017, and its application to the petitioner’s situation. This section stipulates that an opportunity for a personal hearing must be granted either upon a written request from the person liable for tax or penalty or when an adverse decision is being considered against them.

The petitioner argues that relying on a precedent set by a coordinate bench in Bharat Mint & Allied Chemicals Vs. Commissioner Commercial Tax & 2 Ors., (2022) 48 VLJ 325, the Assessing Authority was obligated to provide an opportunity for a personal hearing before issuing an adverse assessment order. In their case, where a disputed tax demand of approximately Rs. 6 crores has been raised, the absence of such a hearing renders the assessment order contrary to the law established in Bharat Mint & Allied Chemicals.

Furthermore, the petitioner cites a decision from the Gujarat High Court in M/S Hitech Sweet Water Technologies Pvt. Ltd. Vs. State of Gujarat, 2022 UPTC (Vol. 112) 1760, to support their argument.

Conversely, the counsel for the revenue argues that the petitioner forfeited their right to a personal hearing by selecting the “No” option in response to the opportunity for a personal hearing provided in the show-cause notice, submitted through an online platform. According to them, having declined this opportunity, the petitioner cannot now contest the subsequent adverse order.

Upon reviewing the arguments presented by both parties and examining the relevant legal provisions, the court refers to Section 75(4) of the Act, which clearly mandates the grant of a hearing before any adverse decision is made against the person liable for tax or penalty.

The court expresses complete agreement with the stance taken by the coordinate bench in Bharat Mint & Allied Chemicals. It emphasizes that the law does not require the assessee to explicitly request a personal hearing; instead, it places the responsibility on the Assessing Authority to provide such an opportunity before issuing an adverse order. Therefore, the fact that the petitioner may have declined the option for a personal hearing holds no legal significance in this context.

In summary, the court upholds the petitioner’s argument, emphasizing that the Assessing Authority was obligated to provide a personal hearing before passing an adverse assessment order, regardless of the petitioner’s response to the option for a personal hearing in the show-cause notice.