Tax Authorities Ordered to Restart Proceedings After Skipping Mandatory Show Cause Notice Under Section 74(1)

HC found that tax authorities violated procedural requirements by issuing a liability notice under Section 74(5) without first serving a show cause notice under Section 74(1) of the UP GST Act. The court quashed the impugned orders and directed authorities to restart proceedings with proper statutory notice, ensuring due process for the petitioner.

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Issues involved: Challenge to orders passed under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017 without proper notice.

Summary:

Issue 1: Lack of proper notice under Section 74(1) of the Act
The petitioner challenged the orders dated July 30, 2021 and August 31, 2022 passed by the Assistant Commissioner and Additional Commissioner, Grade-2 (Appeal) respectively, on the ground that no notice was issued to the petitioner under Section 74(1) of the Act. The court noted that a notice was issued under Section 74(5) of the Act on June 4, 2021, asserting tax liability, but no show cause notice under Section 74(1) was given. The court held that the proper procedure was not followed, rendering the impugned orders without legal basis. Consequently, the court quashed and set aside the impugned orders, allowing the writ petition.

Decision:
The court allowed the writ petition, quashed the impugned orders, and directed the respondents to proceed in the matter after issuing a notice under Section 74(1) of the Act.

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