Opportunity of personal hearing must be afforded before passing any order which contains serious liabilities even if the party has chosen “NA” against the column of personal hearing on the online portal.

Case Title: Mohan Agencies v. State of U.P.

Court: High Court of Allahabad

Petition No.: Writ Tax No. 58 of 2023

Date of Judgement: 13 February 2023

Category of Dispute: GST Assessment – Violation of Natural Justice

Relevant Section: Section 75(4) of the U.P. GST Act, 2017

Facts of the Case

[Para 3–4]
Mohan Agencies challenged the assessment order dated 21.10.2022 passed by the Assistant Commissioner, State Tax, Aligarh for the tax period July 2017 to March 2018, raising a demand of over ₹10 crores. The grievance was that while a show cause notice was issued on 13.05.2022, no opportunity for a personal hearing was granted. The notice itself indicated “NA” under the date, time, and venue of personal hearing columns.

Questions in Consideration

[Para 4–5]

• Whether denying an oral hearing violates Section 75(4) of the U.P. GST Act, 2017?
• Whether an assessee’s online selection of “No” to the personal hearing option precludes their right to be heard under law?

Observation of the Court

[Para 7–10]

• The Court reaffirmed the interpretation in Bharat Mint & Allied Chemicals v. CCT, that Section 75(4) mandates the granting of a personal hearing whenever an adverse decision is contemplated, regardless of whether it is requested by the assessee.
• The taxpayer’s selection of “No” in the online form does not override this statutory right.
• Given the heavy civil liability imposed, even minimal opportunity of hearing is essential.
• Denial of such opportunity violates the principles of natural justice and prejudices the taxpayer’s right to defend.

Judgement of the Court

[Para 11]
The writ petition was allowed. The impugned assessment order dated 21.10.2022 was quashed. The matter was remanded back to the Assistant Commissioner, State Tax, Sector-6, Aligarh to issue a fresh notice within two weeks and provide the petitioner an opportunity of personal hearing before passing any order.

Between Fine Lines

This case establishes that a personal hearing must be granted in all cases where an adverse order is contemplated under Section 75(4) of the GST Act. Even if the assessee declines a hearing via online form, the authority must still offer one. Denial of such hearing, especially in high-stake demands, violates natural justice. Orders passed without hearing are liable to be set aside. The case reinstates that procedural fairness is non-negotiable in GST adjudication.

Summary of Referred Cases

Takeaway

“Ticking ‘No’ Online Can’t Override Natural Justice”