Assessee is entitled to one opportunity of a personal hearing before the Authority passes the order

[CA Bimal Jain]

The Hon’ble Allahabad High Court in the case of AKBAR ALI TRANSPORT SERVICES VERSUS STATE OF U.P. AND ANOTHER - 2024 (1) TMI 572 - ALLAHABAD HIGH COURT held that the Petitioner is entitled to one opportunity of hearing before the authority to furnish his explanation and establish the facts of the case before the Assessing Authority pass a reasoned order.

Facts:

Akabar Ali Trasport Services (“the Petitioner”) goods were found loaded on the truck that was intercepted on November 11, 2023, and proceedings were initiated under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017 (“the UPGST Act”). A Show Cause Notice on MOV-07 (“the Impugned Notice”) was issued to the M/s Royal Enterprises (“the Dealer”). However, no Show Cause Notice (“SCN”) was issued to the Petitioner to show cause why the truck may not be seized and the Revenue Department (“the Respondent”) passed an ex-parte penalty order (“Impugned Order”) against the Petitioner under FORM MOV-09.

Hence, aggrieved by the Impugned Order the present writ petition was filed by the Petitioner.

Issue:

Whether the Assessee is entitled to one opportunity of hearing before a reasoned order is passed by the Assessing Authority?

Held:

The Allahabad High Court in AKBAR ALI TRANSPORT SERVICES VERSUS STATE OF U.P. AND ANOTHER - 2024 (1) TMI 572 - ALLAHABAD HIGH COURT ­­­­­­­­­ held as under:

• Opined that, the Petitioner may not be entitled to release of the truck unless he deposits INR 1,00,000/- as provided under the first proviso of Section 129 (6) of the UPGST Act. In such facts, it appears that the Petitioner is entitled to one opportunity of hearing before the authority to furnish his explanation and to establish the fact.
• Held that, the truck is the valuable property and a capital asset of the transporter which is utilized to generate revenue/ income. Therefore, the Petitioner’s rights were adversely affected due to the Impugned Order.
• Directed that, the Petitioner to treat the Impugned Order as the Show Cause Notice and furnish reply to the Respondent only for the purpose of obtaining release of the truck. Thereafter, a reasoned order may be passed by the said Respondent after affording due opportunity of hearing to the Petitioner. If the claim of the Petitioner for the release of the truck was rejected, due reason for the same may be given. At that stage the Petitioner may have a right of appeal.
• Held that, the release of the truck, if granted would have no bearing on the seizure of the goods and in the penalty, proceedings arising therefrom against the Dealer. Hence, the writ petition was disposed of.

(Author can be reached at info@a2ztaxcorp.com)