2025 (4) TMI 619 - HC - GST

Tax Assessment Order Invalidated: Procedural Flaws Expose Critical Gaps in Deputy Commissioner's Reasoning Under GST Act

M/s Hari Shanker Transport Versus Commissioner of Commercial Tax U.P. Lucknow and another

HC quashed tax assessment order due to procedural deficiencies. The court found the Deputy Commissioner's order lacking proper reasoning and factual ... Violation of principles of natural justice - order impugned has been passed without indicating any reason whatsoever - HELD THAT:- The manner of passing of order dated 27.04.2024 falls foul of the requirements of Section 75(6) of the Act, which requires that 'the proper officer, in his order shall set out the relevant facts and the basis of his decision', the statutory requirements for passing an order by setting out relevant facts and basis for the decision are totally missing from the order dated 27.04.2024. Even if no response was filed to the notices issued under Sections 61 and 73 of the Act, it was incumbent on respondent no. 2 to pass an order in compliance of the provisions of Section 75(6) of the Act, as a final order should be self contained and merely making reference to the previous notices while passing the said order does not suffice for making it a self contained order. The matter is remanded back to respondent no. 2/Deputy Commissioner, State Tax, Sector-3, Sonbhadra to provide an opportunity of filing response to the show cause notice issued under Section 73 of the Act to the petitioner - Petition allowed by way of remand. In the case before the Allahabad High Court, the petitioner challenged orders dated 27.04.2024 and 25.10.2024 issued by the Deputy Commissioner, State Tax, under Sections 73(9) and 161 of the Goods and Services Tax Act, 2017. The petitioner argued that the order under Section 73(9) was issued without proper reasoning, contravening Section 75(6) of the Act, which mandates that an adjudicating officer must 'set out the relevant facts and basis of his decision.'The petitioner failed to respond to notices under Sections 61 and 73 due to unawareness of their issuance, leading to a tax liability of Rs. 85,84,759/-. A subsequent rectification application under Section 161 was also rejected. The court found the order dated 27.04.2024 deficient as it merely referenced prior notices without detailing the facts or reasoning, thus not constituting a self-contained order as required by law.The court quashed the order dated 27.04.2024 and remanded the matter back to the Deputy Commissioner, instructing them to allow the petitioner to file a response to the show cause notice under Section 73 and to issue a fresh, compliant order after a hearing.