Shri Jai Durege Builders vs. State Of U.P. And 2 Others
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The petitioner, Shri Jai Durege Builders, challenged an order dated 16.02.2025 passed under Section 73(9) of the UPGST Act, 2017. A notice under Section 73 was issued on 30.10.2024, granting one month for compliance. The petitioner filed a reply on 22.11.2024. The proceedings were scheduled for 29.11.2024, but no order was passed on that date. The assessing authority did not fix another date or communicate any further date to the petitioner. Instead, an order was passed on 16.02.2025, approximately 84 days later, without any further opportunity to the petitioner. The petitioner argued that the order was passed ex-parte without proper communication of a new date.
Held
The Court held that the impugned order dated 16.02.2025, passed under Section 73(9) of the UPGST Act, 2017, is vitiated by a breach of natural justice. The Court reasoned that once a date for hearing was fixed (29.11.2024), it was incumbent upon the assessing authority to either pass an order on that date or fix another date and communicate it to the petitioner. By failing to do so and passing an order 84 days later without any further notice or opportunity, the authority rendered the proceedings ex-parte against the petitioner. The Court found the breach of natural justice to be real, especially as no provision under the Act allows for such ex-parte proceedings in these circumstances. The Court also noted that the proceedings remained pending for four months after the petitioner filed their reply without any date being fixed. Consequently, the Court set aside the order dated 16.02.2025. The petitioner was directed to treat the set-aside order as a final notice and file their reply with supporting documents within two weeks. The respondent was directed to fix a short date for hearing with at least one week's notice to the petitioner and pass a reasoned order after hearing them.
Key Issues
1. Whether the order dated 16.02.2025, passed under Section 73(9) of the UPGST Act, 2017, is vitiated by a breach of natural justice due to the absence of a further date being fixed and communicated to the petitioner after the hearing scheduled for 29.11.2024. Petitioner's arguments: The petitioner contended that the impugned order is ex-parte as no fresh date was fixed or communicated after 29.11.2024. They relied on decisions in M/S Videocon D2H Limited and Ors. Vs. State of U.P. and 3 Ors and M/S Aroma Chemicals Vs. Union of India & Ors. The petitioner argued that the assessing authority's conduct forced an ex-parte nature on the order. Revenue's arguments: The Standing Counsel for the State respondents argued that the petitioner has a remedy of appeal and is to blame for not complying with the notice dated 30.10.2024. The Court was not impressed by this objection.
Sections Cited
Section 73, Section 73(9)
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HIGH COURT OF JUDICATURE AT ALLAHABAD WRIT TAX No. - 4167 of 2025 Court No. - 3 HON'BLE SHEKHAR B. SARAF, J. HON'BLE PRAVEEN KUMAR GIRI, J.
Heard Mr. Shrinath, learned counsel for the petitioner, Mr. Ankur Agrawal, learned Standing Counsel for the State respondents and perused the record.
Challenge has been raised to the order dated 16.02.2025 passed on FORM GST DRC-07 under Section 73 (9) of the UPGST Act, 2017 (hereinafter referred to as the 'Act').
Merit issues apart, it is undisputed that on 30.10.2024 a notice under Section 73 of the Act, was issued to the petitioner granting one month time to make compliance. Since the petitioner chose to contest the proceedings, on 30.10.2024 notice on DRC-01 was issued granting the petitioner 23 days time to file reply.
That error apart, it is also undisputed to the respondent that the petitioner did file reply to the notice on 22.11.2024. Thereafter no proceeding appears to have been conducted over a long period of three months. The date fixed in the proceedings was 29.11.2024. 5. On the other hand Mr. Ankur Agrawal, learned Standing Counsel states that the petitioner did not appear on the next date. In any case no time was sought.
Whatever be the correct fact as to the status of proceedings conducted on 29.11.2024, the order does not make any mention of the same. It is equally true that the assessing authority did not pass any order on the date fixed i.e. Versus Counsel for Petitioner(s) : Shrinath Counsel for Respondent(s) : C.S.C. Shri Jai Durege Builders .....Petitioner(s) State Of U.P. And 2 Others .....Respondent(s)
2024. Instead he has chosen to pass the order on 16.02.2025, 84 days thereafter. Neither the impugned order nor the instructions of the learned Standing Counsel indicate that any date was fixed for 16.02.2025. Without fixing any further date and without giving petitioner any further opportunity the impugned order has been passed.
In such facts, learned counsel for the petitioner submits that the impugned order is really ex-parte. He also did not communicate the fresh date in the proceedings.
Thus relying on Coordinate Bench decision of this Court in M/S UPTC 237, M/S Aroma Chemicals Vs. Union of India & Ors Neutral Citation No.-2014:AHC:60699-DB, it has been submitted, such an order may not stand.
While learned Standing Counsel has submitted that petitioner has the remedy of appeal and that the petitioner is itself to blame in as much he did not comply with the notice dated 30.10.2024, we are not impressed by the objection being raised.
Rules of natural justice ensure fairness in proceedings. Once the authority had fixed the matter for hearing on 29.11.2024 it was incumbent on that authority either to pass the order or to fix another date and communicate the same to the petitioner. Communication of the other date was necessary as according to the assessing authority the petitioner failed to appear before it on the date fixed on 29.11.2024. 11. By not passing the order on 29.11.2024 and not communicating the next date fixed in the proceedings, the assessing authority forced the ex-parte nature of the order on the petitioner, by its own conduct.
In absence of any provision under the Act to allow for ex-parte proceedings to arise in such facts, we find that the breach of natural justice pressed by the petitioner is real.
Also we are mindful that proceeding had remained pending for four months since reply was filed by the petitioner, without any date being fixed. In any case since no order was passed on 29.11.2024 and no notice was issued for the next date 16.02.2025, we find that the proceedings had been wrongly concluded ex-parte against the petitioner.
In such facts, no useful purpose may be served in keeping the petition pending or calling counter affidavit at this stage.
Accordingly the writ petition is disposed of with the following observations :- (I) The order dated 16.02.2025 is set aside. The petitioner may treat the said order to be the final notice issued to him. It may file its reply together with all supporting documents within a period of two weeks from today. (II) Thereupon the respondent No.4 may fix a short date for hearing with at least one week notice to the petitioner and pass appropriate reasoned order after hearing the petitioner, thereafter. September 18, 2025 Dev (Praveen Kumar Giri,J.) (Shekhar B. Saraf,J.) DEV PRAKASH High Court of Judicature at Allahabad
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.