Manufacturing Company Wins Challenge Against GST Tax Demand Due to Procedural Flaws in Appellate Order

HC allowed writ petition challenging GST tax demand against manufacturing company. Court found procedural irregularities in appellate order, specifically lack of hearing and improper judgment delivery. Impugned orders were quashed and matter remanded for fresh consideration, directing expeditious resolution within three months with proper opportunity of hearing to all parties.

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The Allahabad High Court, through Hon'ble Piyush Agrawal, J., allowed the writ petition challenging the impugned orders dated 10.05.2022 and 25.09.2024 passed by the Additional Commissioner, Grade - 2 (Appeals), Mainpuri and respondent no. 3 under the GST Act. The petitioner, a Private Limited Company engaged in manufacturing glass bottles, was issued a show cause notice under section 74(1) of the GST Act alleging fraudulent availing of Input Tax Credit (ITC). The petitioner contended that the demand and penalty order were passed without providing a copy of the survey report or opportunity of hearing.Crucially, the Court noted that the appeal order was reserved on 18.09.2024 but delivered on 25.09.2024 without notice to the petitioner, and found no provision in the GST Act permitting reserving judgment and delivering it later without hearing. Relying on the precedent in M/s Wonder Enterprises Vs. Additional Commissioner [Writ Tax No. 1150/2024], the Court held that the impugned appellate order "cannot be sustained in the eyes of law" due to procedural infirmity.Accordingly, the Court quashed the impugned order dated 25.09.2024 and remanded the matter to the Additional Commissioner for reconsideration de novo, directing that a due opportunity of hearing be granted to all stakeholders and the matter be decided expeditiously within three months.

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