A recent writ petition filed under Article 226 of the Constitution of India has brought to light the challenge against an order passed by the Deputy Commissioner, Audit Wing, Jabalpur. The order in question, upheld the tax, interest, and penalty mentioned in the show cause notice dated. The petitioner's counsel argues that the order is unsustainable due to the absence of a personal hearing, which is mandated by Section 75(4) of the M.P.G.S.T. Act.
The Personal Hearing Requirement
The petitioner's counsel contends that after receiving a notice of tax liability under Section 74(5) of the Act, a reply was promptly submitted on 23.06.2022. Subsequently, a show cause notice was issued on 22.07.2022, which mentioned the provision of a personal hearing. However, the notice failed to specify the date, time, and venue for this hearing. According to Section 75(4) of the Act, a personal hearing is deemed necessary before passing any impugned order, as explicitly stated in the notice itself. In support of this argument, the counsel cites the Allahabad High Court's decision in the case of Bharat Mint & Allied Chemicals Vs. Commissioner of Commercial Tax.
The Allahabad High Court Decision in the case of Bharat Mint & Allied Chemicals Vs. Commissioner of Commercial Tax.
The co-ordinate bench of the Allahabad High Court addressed two questions in the aforementioned case:
The court examined the show cause notice, which contained a provision for a personal hearing without specifying the date, time, or venue. Referring to Section 75(4) of the Act, the court emphasized that a hearing must be granted when a person liable for tax or penalty requests it or when any adverse decision is anticipated against them. Even in cases where an adverse decision is expected, the person affected does not need to request a personal hearing—it is the responsibility of the concerned authority to provide one.
Court's Decision and Conclusion
Considering the arguments presented by both parties, it is evident that the show cause notice in question intended to grant the petitioner a personal hearing. However, the absence of a date, time, and venue in the notice suggests that no hearing was conducted before passing the impugned order.
Regarding the respondents' argument about the availability of an alternative remedy through appeal, it is well-established that when a required opportunity for hearing has not been granted and the principles of natural justice have been violated, the availability of alternative remedies does not preclude the exercise of jurisdiction under Article 226 of the Constitution of India.
In light of the above discussion and following the precedent set by the co-ordinate bench of the Allahabad High Court, the impugned order is deemed unsustainable and hereby quashed. The matter is remitted back to the Deputy Commissioner, Audit Wing, Jabalpur, with a directive to pass a fresh order after providing the petitioner with a proper personal hearing.
In conclusion, the writ petition successfully highlights the violation of the personal hearing requirement and leads to the quashing of the impugned order.
Concord Tieup Pvt. Ltd. Versus The State of Madhya Pradesh Joint Commissioner Audit Wing Commercial Tax officer Ghantaghar Jabalpur (M.P.)
MADHYA PRADESH HIGH COURT
Date of order: 25/04/2023
Comment: