Case Summary: Party Time Hospitality Prop. Smt. Punita Gupta Lko. vs. State of U.P. & Others
Case Number: WRIT TAX No. 176 of 2023
Neutral Citation Number: 2023:AHC-LKO:57456
Date of Order: 28th August 2023
Court: High Court of Judicature at Allahabad, Lucknow Bench
Summary Of Case: This case revolves around the challenge made by Party Time Hospitality, owned by Smt. Punita Gupta, against a tax demand confirmed under Section 74 of the GST Act. The petitioner contested the demand, arguing that they had no involvement in the party lawn’s operations during the period under scrutiny and that the process violated the principles of natural justice.
Facts of the Case:
· Petitioner: Party Time Hospitality, owned by Smt. Punita Gupta, operates a party lawn based on a lease deed executed on 1st August 2018. The petitioner had no connection with the party lawn before this date.
· Respondent: State of Uttar Pradesh through its Principal Secretary, Tax and Registration Department, and two others.
· A show-cause notice was issued on 28th September 2021 under Section 74 of the GST Act, requiring the petitioner to explain the alleged tax evasion for the period from July 2017 to March 2018.
· The notice indicated the amount due but did not provide details about the personal hearing, which is a mandatory requirement under Section 75(4) of the GST Act.
· The petitioner did not respond to the notice, leading to an ex parte order on 16th November 2021, confirming the tax and penalty.
· The petitioner’s appeal against this order was dismissed on 4th August 2023 due to the appeal being filed beyond the prescribed limitation period.
Submissions by Petitioner:
· The petitioner’s counsel argued that the show-cause notice failed to justify the invocation of Section 74 of the GST Act and did not provide details necessary for a personal hearing.
· The counsel also relied on similar cases, including *M/s Mohini Traders v. State of U.P.*, where the court had set aside such orders due to the absence of a hearing, emphasizing the mandatory nature of Section 75(4) of the GST Act.
Submission by Respondent:
· The respondent’s counsel argued that the petitioner failed to respond to the notice and that the appeal was dismissed correctly due to being time-barred.
Findings and Judgement:
· The Court found that the assessment order was passed without granting a personal hearing, which is a violation of Section 75(4) of the GST Act and the principles of natural justice.
· The Court set aside both the impugned orders dated 16th November 2021 and 4th August 2023 and remanded the case back to the respondents for fresh adjudication, ensuring compliance with the legal requirement for a personal hearing.
Conclusion:
· The writ petition was allowed, and the case was remanded to the respondents to pass fresh orders after providing an opportunity for a personal hearing, in compliance with Section 75(4) of the GST Act.
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