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Case Summary: M/S Sumit Enterprises (Proprietor: Atul Kumar) vs.
State of U.P. & Others
Case Number: WRIT TAX No.
167 of 2023
Date of Order: 9th
October 2023
Court: High Court of
Judicature at Allahabad, Lucknow Bench
Summary Of Case: This
case involves the challenge by M/S Sumit Enterprises against the dismissal of
their appeal under Section 107 of the GST Act as being time-barred and the
demand created under Section 74 of the GST Act. The petitioner argued that they
mistakenly availed Input Tax Credit (ITC) and did not utilize it, and hence,
the demand and subsequent dismissal were unjust.
Facts of the Case:
·
Petitioner:
M/S Sumit Enterprises, a bona fide firm operating legally, mistakenly availed
ITC in a return but rectified the error by filing a corrected return in July
2019.
·
Respondent:
The State of Uttar Pradesh through its Principal Secretary, Ministry of
Finance, and two others.
·
A notice under Section 74 of the GST Act
was issued to the petitioner on 25th June 2021, based on a survey conducted on
27th April 2019, proposing a liability of ₹1,48,160.
·
The petitioner requested an adjournment to
reply to the notice due to the unavailability of their advocate but did not
receive a personal hearing as mandated by law.
·
Subsequently, orders were passed without a
personal hearing, leading to a demand under Section 74 of the GST Act.
Submissions by Petitioner:
·
The petitioner's counsel argued that the
original order violated the principles of natural justice and the mandate of
Section 75(4) of the GST Act, which requires an opportunity for a personal
hearing before making an adverse decision.
Respondent:
·
The respondents acknowledged that no
personal hearing was granted, as indicated by the records where "NA"
was transcribed under the columns for the date, time, and venue of the personal
hearing.
Findings and Judgement:
· The
Court found that the original order was indeed contrary to the mandate of
Section 75(4) of the GST Act, which mandates a personal hearing.
·
The lack of a personal hearing and the
violation of natural justice principles led to the quashing of the original
order dated 15th March 2022, and the subsequent appeal dismissal order dated
29th March 2023.
Conclusion: The
Court allowed the petition, quashing both the orders dated 15th March 2022 and
29th March 2023. The case was remanded to the respondent to pass fresh orders
after providing an opportunity for a personal hearing and allowing the
petitioner to file a reply to the show-cause notice.
Disclaimer: All the
Information is based on the notification, circular and order issued by the
Govt. authority and judgement delivered by the court or the
authority information is strictly for educational purposes and on the
basis of our best understanding of laws & not binding on anyone.
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