Sub-Section 4 of Section 75 of the GST Act mandates an opportunity of hearing, including a personal hearing, when an adverse decision is contemplated against the person chargeable with tax or penalty, regardless of whether a specific request for such hearing is made.

With the consent, finally heard.

2.

Regard being had to the similitude of the questions involved, on

the joint request of learned counsel for the parties, the matters are

analogously heard and decided by this common order.

3.

This common order will decide both the writ petitions wherein

the petitioners have called in question the show cause notices and the

impugned orders whereby the tax and interest and panalty have been

imposed on the petitioners.

4.

The singular point raised by learned counsel for the petitioners is

that the decision making process adopted by the respondents is

contrary to the principles of natural justice and statutory mandate

ingrained in Sub Section 4 of Section 75 of the Goods and Services

Tax (Act).

5.

To elaborate, the facts are taken from W.P. No.13618 of 2023.

The scrutiny was concluded on 6.5.2022. A show cause notice dated

7.10.2022 (Annexure P-4) was issued, wherein the amount determined

was Rs.7.37 crores. The petitioner filed reply to the show cause notice

on 21.1.2023. In the final order dated 17.2.2023 (Annexure P-6), the

amount of tax, interest and penalty is quantified as Rs.9.76 crores. It is

pointed out that in the other connected matter, the dates are almost

same. However, the amount mentioned in the show cause notice is

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Rs.1.18 crores, whereas final tax, interest and penalty imposed is to the

tune of Rs.14.56 crores.

6.

Learned counsel for the petitioners submits that a plain reading

of Sub Section 4 of Section 75 of the Act makes it clear that providing

opportunity of hearing is a mandatory requirement. The said

requirement needs to be fulfilled in twin situations :-

(I)

When a specific request is received in writing from a person

chargeable with tax or where any adverse decision is contemplated

against such person. Learned counsel for the petitioners submits that

the use of word ‘or’ is very important in this statutory provision.

Admittedly, in the present cases, the adverse decision was

contemplated on said contemplation is translated into reality, when tax

was levied on the petitioners. In that event whether or not the

petitioners specifically opted/demanded for a personal hearing, a

personal hearing ought to have been provided. In absence thereof, the

principles of natural justice and statutory mandate mentioned in Sub

Section 4 of Section 75 of the Act are grossly violated.

(II)

In support of his submission, learned counsel for the petitioners

placed reliance on the judgment of this Court reported in (2023) 4

Centax 198 (M.P.) (19.01.2023) (Ultratech Cement Ltd. Vs. Union

of India), the judgment of Gujarat High Court reported in 2022 (66)

G.S.T.L. 38 (Guj.) (23.06.2022) (Graziano Trasmissioni India Pvt.

Ltd. Vs. State of Gujarat) and lastly on a Division Bench judgment of

Allahabad High Court reported in 2023 (8) TMI 1091, Allahabad

High Court, (M/s. BL Pahariya Medical Store Vs. State of U.P. and

another).

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7.

Per contra, learned counsel for the State submits that petitioners

have not projected requirement of Sub Section 4 of Section 75 of the

Act in a proper manner. This provision nowhere talks about

opportunity of ‘personal hearing’. On the contrary, it talk about only

‘opportunity of hearing’. Pursuant to the show cause notice issued as

prescribed in form DRC-01, the petitioner was required to opt for

‘personal hearing’ which was admittedly not opted and in that event,

no fault can be found in the action of the respondents.

8.

Faced with this, learned counsel for the petitioners has placed

heavy reliance on the said prescribed form wherein ‘detail of personal

hearing etc.’ were mentioned. It is submitted that five heads mentioned

in this prescribed statutory form itself makes it clear that there are two

stages, one relates to filing of reply and second regarding grant of

personal hearing. Thus, law makers were conscious that personal

hearing is different than the requirement of filing reply alone and that

is why statutory form prescribes it in that man