2025 (6) TMI 102 - HC - GST

GST Act Order Quashed for Procedural Flaws: Statutory Violation of Natural Justice Principles Invalidates Appellate Proceedings

HC allowed writ petition challenging GST Act orders, finding procedural irregularities in appellate proceedings. The court quashed the impugned order due ... Challenge to impugned order - ITC has been availed by fraud or mis-statement - HELD THAT:- In the personal affidavit filed by Additional Commissioner, Grade - 2 (Appeals), Mainpuri, pursuant to the order of this Court, there is no mention of any provision or notification empowering the authority not passing the judgement on the date fixed, but on a later date, to which neither any notice was issued nor the petitioner was heard on the next date. The issue in hand is squarely covered by the judgement of this Court in M/s Wonder Enterprises [2024 (9) TMI 1749 - ALLAHABAD HIGH COURT] where it was held that 'Once the higher authority under the GST Act and the counsel appearing for the State has accepted the fact that there is no such provision for passing an order on a later date of hearing, the impugned order 07.03.2024 passed by respondent no. 1 in Appeal No. GST AD0905220410341/2022, F.Y. 2018-19 cannot sustain in the eyes of law and the same is liable to be dismissed.' The impugned order dated 25.09.2024 passed by the Additional Commissioner, Grade - 2 (Appeals), Mainpuri cannot be sustained in the eyes of law. The matters require reconsideration - Petition allowed by way of remand. 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) GST Act alleging fraudulent ITC claims. The petitioner contended that the demand and penalty order was passed without providing the survey report or opportunity of hearing.Crucially, the Court noted the absence of any statutory provision permitting the Additional Commissioner to reserve judgment and deliver it later without notice to the petitioner, holding that 'there is no provision in the GST Act for reserving the judgement and delivering the judgement later on.' Reliance was placed on the Court's prior decision in M/s Wonder Enterprises Vs. Additional Commissioner [Writ Tax No. 1150/2024], which addressed this procedural infirmity.The Court quashed the impugned appellate order dated 25.09.2024, finding it unsustainable in law due to the violation of principles of natural justice. The matter was remanded for de novo consideration, directing the Additional Commissioner to grant due opportunity of hearing to all stakeholders and decide the issue expeditiously, preferably within three months.