Sahu Enterprises vs State of Uttar Pradesh

Heard Sri Pranjal Shukla, learned counsel for the assessee, and Sri Ankur Agarwal, learned counsel for the revenue. Sri Ankur Agarwal has received written instructions, and in the absence of any factual dispute, the matter has proceeded with the consent of both parties at the fresh stage itself. The petitioner challenges the order dated 03.11.2023, passed by the Assistant Commissioner, State Tax, Sector-2, Pratapgarh, Prayagraj, for the tax period 2019-20, whereby a demand in excess of Rs. 4,37,156.6/- has been raised against him. The primary ground of contention is that the only notice issued in the proceedings was on 08.07.2021, seeking a reply within 30 days. The petitioner points out that the Assessing Authority had precluded any opportunity for a hearing by marking “NA” against the columns for “Date of personal hearing,” “Time of personal hearing,” and “Venue where personal hearing will be held.” This, according to the petitioner’s counsel, completely denied the petitioner an opportunity for an oral hearing before the Assessing Authority.

Citing Section 75(4) of the U.P. GST Act, 2017, as interpreted by a coordinate bench of this Court in Bharat Mint & Allied Chemicals Vs. Commissioner Commercial Tax & 2 Ors., (2022) 48 VLJ 325, it is asserted that the Assessing Authority was bound to afford an opportunity for a personal hearing before passing an adverse assessment order. The assessment order, raising a disputed demand of about Rs. 4,87,156.6/-, is wholly adverse to the petitioner. In the absence of a hearing, the order is contrary to the law declared in Bharat Mint & Allied Chemicals (supra). Reliance is also placed on a decision of the Gujarat High Court in M/S Hitech Sweet Water Technologies Pvt. Ltd. Vs. State of Gujarat, 2022 UPTC (Vol. 112) 1760.

Conversely, learned counsel for the revenue contends that the petitioner was denied a hearing because he had ticked ‘No’ against the option for a personal hearing in his reply to the show-cause notice submitted online. Having thus declined the opportunity, the petitioner cannot now claim any error in the impugned order. Further, if the Proper Officer was of the view that the reply was unsatisfactory and more details were required, he could have specifically sought those details from the petitioner. However, the record does not reflect that any such opportunity was given to the petitioner to clarify his reply or furnish further documents or details. In view of the above, the order cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication.

Accordingly, the impugned order dated 03.11.2023 is set aside, and the matter is remitted to the Proper Officer for re-adjudication. The Proper Officer is directed to intimate to the petitioner the details or documents that may be required to be furnished. Upon intimation, the petitioner shall furnish the requisite explanation and documents. Thereafter, the Proper Officer shall re-adjudicate the show cause notice, giving the petitioner an opportunity for a personal hearing, and shall pass a fresh speaking order in accordance with the law within the period prescribed under Section 75(3) of the Act.