M/S Inder Bhan Singh Thru. Proprietor Indra Bhan Singh vs. State Of U.P. Thru. Prin. Secy. Institutional Finanfe And Another

Held

The Court disposed of the writ petition with a direction to the petitioner to approach the Appellate Authority under Section 107 of the GST Act. However, the Court expressed strong disapproval of the practice of issuing notices under Section 73 of the Act without specifying the date, time, and place of personal hearing, noting that this practice persists despite settled law and departmental circulars to the contrary. The Court observed that such notices violate principles of natural justice. As a consequence of this practice, the Court directed Ms. Smriti Gupta, Commercial Tax Officer, Ayodhya Sector-5, Ayodhya (B), Ayodhya, U.P., to undergo three months of training and to be excluded from adjudicatory roles during that period. The Court did not decide on the merits of the tax liability or the validity of the Section 73 order itself, leaving that to the appellate authority.

Facts

The petitioner, M/S Inder Bhan Singh, a sole proprietorship firm, challenges an order dated February 21, 2025, passed by the Opposite Party No. 2 under Section 73 of the GST Act. This order imposed a tax liability, interest, and penalty of Rs. 19,43,358/- for the period April 2020 to March 2021. The petitioner received a notice under Section 61 on July 18, 2022, followed by a notice under Section 73(1) on November 27, 2024, which they claim they could not access. The petitioner contends that the Section 73(1) notice did not specify the place, time, or date for a personal hearing. The State respondents point to the statutory remedy of appeal under Section 107.

Key Issues

1. Whether the order dated February 21, 2025, passed under Section 73 of the GST Act is liable to be quashed on the grounds that the preceding notice under Section 73(1) did not specify the date, time, and place of personal hearing, thereby violating principles of natural justice? Petitioner's Arguments: The petitioner argues that the notice issued under Section 73(1) was deficient as it failed to mention the date, time, and venue for a personal hearing, which is a mandatory requirement. They rely on settled law and departmental circulars that mandate the inclusion of these details in show cause notices. They seek a direction for a personal hearing before the Proprietor of the Firm. Revenue's Arguments: The State respondents contend that a statutory remedy of appeal under Section 107 of the GST Act is available to the petitioner, and therefore, the writ petition should not be entertained.