Allowed

M/S Hitech Sweet Water Technologies Pvt. Ltd. v. State of Gujarat

Gujarat HC6 Oct 2022SCA/14347/2022

Case brief

AI extract

What is this about?

High Court of Gujarat quashed three Gujarat GST orders imposing tax, interest, and penalty for financial years 2017-18 to 2019-20. The court held orders violative of natural justice as no personal hearing was granted. It directed the authority to grant hearing within three weeks and pass fresh orders.

What did the court decide?

Impugned orders dated 19.04.2022 set aside; competent authority directed to grant personal hearing within three weeks and pass fresh orders within two weeks.

M/S Hitech Sweet Water Technologies Pvt. Ltd. Vs State… — GST and Indirect Tax | Gujarat HC (2022)

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C/SCA/14347/2022 ORDER DATED: 06/10/2022

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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R/SPECIAL CIVIL APPLICATION NO. 14347 of 2022

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==========================================================

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M/S HITECH SWEET WATER TECHNOLOGIES PVT. LTD.

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Versus

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STATE OF GUJARAT

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==========================================================
Appearance:

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MR KARANKUMAR J SUKAWALA(10263) for the Petitioner(s) No.
1,2

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MR MUKUND KUMAR CHOUHAN(10259) for the Petitioner(s) No.
1,2

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 for the Respondent(s) No. 1

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NOTICE SERVED BY DS for the Respondent(s) No. 1,2

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CORAM: HONOURABLE MR. JUSTICE N.V.ANJARIA

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and

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HONOURABLE MR. JUSTICE BHARGAV D. KARIA

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Date : 06/10/2022

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ORAL ORDER

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 (PER : HONOURABLE MR. JUSTICE N.V.ANJARIA)

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Heard learned advocate Mr. Karankumar J.

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Sukawala for the petitioners and learned Asst.
Government Pleader Mr. Trupesh Kathiriya for the
respondents.

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2.By filing this petition under Article 226 of the
Constitution, the petitioner has challenged the
orders, each dated 19.04.2022 in respect of financial
years 2017-18, 2018-19 and 2019-20, whereby with
respect of three years, the competent authority of
the respondent called upon the petitioner to pay
amount of tax under Section 73(9), to pay interest
under section 50 and further to pay 10% penalty under

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Page 1 of 5

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C/SCA/14347/2022 ORDER DATED: 06/10/2022

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Section 73(9) of the Gujarat Goods and Service Tax
Act, 2017. It was provided that unless the said
amounts are paid within 30 days, the authorities will
proceed to recover by taking resort to Sections 78
and 79 of the Act.

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2.1 The petitioners have also challenged the show-
cause notices dated 13.03.2022 for the same three
financial years, which notices were basis for passing
the aforesaid orders.

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3.Petitioner M/s. Hitech Sweet Water Technologies
Pvt. Ltd. is a manufacturer of water filter machines.
It is registered under the Goods & Services Tax Act
and files monthly returns of sales to discharge the
tax liability regularly, as stated by the petitioner.

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3.1Three show-cause notices for the respective
years in form GST DRC-01 dated 13.03.2022 came to be
issued to the petitioner for the years 2017-18, 2018-
19 and 2019-20 and amount of Rs.5,46,79,672/-,
Rs.2,33,65,984/- and Rs.1,35,60,109/-, was claimed
from the petitioner.

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3.2 Thereafter, the authorities passed final orders
determiningamountsofRs.6,88,92,903/-,
Rs.2,36,64,166/- and Rs. 1,09,47,450/- for the three
respective years.

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3.3 Challenge to the orders and preceding show-cause
notices are based on the ground that the order came

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Page 2 of 5

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C/SCA/14347/2022 ORDER DATED: 06/10/2022

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to be passed in gross violation of principles of
natural justice inasmuch as the petitioner was not
granted opportunity of being heard. By placing
reliance on different judgments including M/s. Alkem
Laboratories Ltd. Vs. Union of India [2021 (46) GSTL
113 (Guj.)], it was submitted that when adverse
order was passed without giving opportunity of
personal hearing, it was liable to be quashed.

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3.4 Sub-sections (4) and (5) of Section 75 of
Central Goods & Service Tax Act, 2017, which the
reliance is placed by the petitioner, reads as under,

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"(4) An opportunity of hearing shall be granted
where a request is received in writing from the
person chargeable with tax or penalty, or where
any adverse decision is contemplated against
such person.

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(5) The proper officer shall, if sufficient
cause is shown by the person chargeable with
tax, grant time to the said person and adjourn
the hearing for reasons to be recorded in
writing:

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Provided that no such adjournment shall be
granted for more than three times to a person
during the proceedings."

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4.There is no gainsaying that the impugned orders
came to be passed without extending opportunity of
personal hearing to the petitioner. In respect of the
orders relating to three assessment years, the
petitioner was not heard. While it is true that in
reply in prescribed form given by the petitioner, in

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Page 3 of 5

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C/SCA/14347/2022 ORDER DATED: 06/10/2022

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response to show-cause notice, the petitioner has
indicated that he did not opt for personal hearing.

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4.1Learned advocate for the petitioner submitted
that it was by a sheer mistake and petitioner is
required to have right to personal hearing exercised,
so that it can put its case properly in response to
the show-cause notice.

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4.2Learned AGP could not dispute the proposition
enunciated from the decision in M/s. Alkem
Laboratories Pvt. Ltd. (supra) relied by the learned
advocate for the petitioner.Learned AGP in
totality of the facts and circumstances, acted fairly
to make a statement before the Court that the
competent authority-respondent, would be giving
personal hearing to the petitioner, which shall be
done within three weeks from today and thereafter
pass afresh orders in connection with the
reassessment order.

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5.Only on the ground of non-compliance of
principles of natural justice in form of not giving
opportunity of personal hearing and in order that the
competent authority is enabled to decide afresh as
per the statement of the learned AGP, the three
impugned orders dated 19.04.2022 (Annexures-C-1 to C-
3 in the petition) issued by respondent no.2 are set
aside.

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5.1 The competent authority, respondent, will give

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Page 4 of 5

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C/SCA/14347/2022 ORDER DATED: 06/10/2022

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opportunity of personal hearing to the petitioner
within three weeks from today and pass in accordance
with law, fresh orders within two weeks from the date
of affording such personal hearing.

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6.This Court has not expressed any opinion nor has
gone into the merits of the case of the either side.

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7.Petition is allowed to the aforesaid extent and
in the same terms. Direct service is permitted.

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(BHARGAV D. KARIA, J)

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BIJOY B. PILLAI

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Page 5 of 5

M/S Hitech Sweet Water Technologies Pvt. Ltd. v. State of Gujarat

Case brief

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M/S Hitech Sweet Water Technologies Pvt. Ltd. v. State of Gujarat

Case brief

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