Tax Order Quashed: Procedural Flaws Invalidate GST Assessment, Mandate Fresh Hearing with Proper Reasoning

HC allowed writ petition challenging tax order under GST Act. The court found procedural irregularities and violation of natural justice principles. Order was quashed, directing tax authorities to provide fresh hearing to petitioner and pass a reasoned order within two months, following principles established in a previous coordinate bench judgment.

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Issues:
Writ petition under Article 226 challenging an order passed under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017.

Analysis:
The judgment delivered by the High Court pertained to a writ petition filed under Article 226 of the Constitution of India challenging an order issued by the Deputy Commissioner, State Tax, Karvi Sector-1, Banda, Uttar Pradesh. The petitioner had expressed grievance regarding the order dated 29.4.2024 passed by the respondent under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner decided not to press the writ petition on Prayer No. 2 and focused only on Prayer No. 1. The Court noted that the factual scenario was akin to a previous judgment of a coordinate Bench in Mahaveer Trading Company vs. Deputy Commissioner State Tax and another. The Court emphasized the importance of providing a personal hearing to the noticee before passing any adverse order in an adjudication proceeding. It was highlighted that the impugned order was in violation of fundamental principles of natural justice, and the self-imposed bar of an alternative remedy could not be applied in such circumstances. The Court held that the impugned order was unsustainable in the eyes of the law due to the procedural irregularities and lack of adherence to natural justice principles.

The Court, after perusing the record and finding similarities with the aforementioned judgment, quashed and set aside the impugned order dated 29.4.2024. A direction was issued to the concerned officer to provide the petitioner with another opportunity to file a fresh reply, schedule a date for a hearing, and subsequently pass a reasoned order. The Court mandated that this entire process should be completed within a period of two months from the date of the judgment. The writ petition was disposed of based on these findings and directions.

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