Validity of UPGST notice upheld; emphasis on proper procedure & independent decision-making

The High Court upheld the validity of the notice issued under Section 73(1) of the UPGST Act, 2017, finding the Assistant Commissioner to be the proper officer for the respondent. The Court emphasized the need for independent application of mind, directed examination of disputed facts, and advised issuing future notices carefully. The petition was disposed of, maintaining the notice's validity and stressing the significance of proper procedure and independent decision-making in such cases.

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Issues:
Challenge to impugned notice under Section 73(1) of the UPGST Act, 2017 on grounds of proper officer jurisdiction, independent application of mind, and prejudgment of tax demand.

Analysis:
The petitioners, M/S Bhardwaj Unibuild Pvt Ltd and M/s Bhardwaj Constructions, challenged the notice issued to M/s Bhardwaj Constructions under Section 73(1) of the UPGST Act, 2017. The first submission was that the Assistant Commissioner, Sector-2, Basti, was not the proper officer of M/S Bhardwaj Unibuild Pvt Ltd due to a business transfer on 30.9.2018. The second submission was that the notice was issued under the dictates of a superior officer, not independently. The third objection was that the Assistant Commissioner prejudged the issue and raised the tax demand prematurely, rendering any reply or hearing futile.

The Revenue's counsel opposed the petition, arguing that the notice was valid and within jurisdiction. They contended that the issuing officer had jurisdiction over M/s Bhardwaj Constructions and that the business transfer issue was a disputed fact for adjudication. They also refuted the claim of issuing the notice under superior officer instructions and emphasized the need to hear petitioner no. 2 before confirming the demand specified in the notice.

The High Court found no grounds to interfere with the petition. Noting that no proceedings had been initiated against M/S Bhardwaj Unibuild Pvt Ltd, the Court held that the notice did not lack inherent jurisdiction. The Assistant Commissioner was deemed the proper officer for M/s Bhardwaj Constructions. The Court acknowledged the factual nature of the business transfer issue and directed its examination in adjudication proceedings. It also clarified that the notice was not solely based on superior officer directions and instructed an independent application of mind by respondent no. 2. The Court highlighted the need for a reasoned order after considering the petitioners' objections and advised caution in wording future show cause notices appropriately.

In conclusion, the writ petition was disposed of with the above observations, maintaining the validity of the notice while emphasizing the importance of independent decision-making and proper procedure in such matters.

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