M/S Ganga Dhar Vijay Kumar vs. State Of U.P. And 4 Others

Facts

The petitioner, M/s Ganga Dhar Vijay Kumar, filed a writ petition challenging various actions by the Uttar Pradesh GST authorities. These actions included Show Cause Notices (SCNs) issued under Section 74 and Section 73 of the UPGST Act for FY 2018-2019 and FY 2017-2018, respectively. The petitioner also challenged an order passed under Section 74 for the tax period July 2017 to March 2018, and an order passed under Section 130 of the UPGST Act for April 2019 to May 2019, along with a rectification order. The petition further challenged the authorization for inspection, search, and seizure, alleging it was done without a proper 'reason to believe' and was based on mala fide intentions and forged complaints. The petitioner sought to quash these proceedings and orders, and for directions regarding the genuineness of complaints and the classification of their case under Section 73 or 74.

Held

The Court noted that while the writ petition challenged various SCNs and orders under Sections 73, 74, and 130 of the UPGST Act, and also the search and seizure procedure, an appeal for FY 2018-19 was already pending under Section 107 of the Act. For the assessment order passed under Section 74 for FY 2017-18, the Court was of the view that the writ petition should be disposed of by allowing the petitioner to file an appeal under Section 107 of the Act. This would cover the assessment order under Section 74 for FY 2017-18 and the penalty imposed under Section 130 of the Act. The Court directed that if the petitioner files an appeal within four weeks, the authorities should hear it expeditiously and pass a reasoned order. The benefit of Section 14 of the Limitation Act, 1963, was also directed to apply. The Court did not decide on the merits of the challenge to the search and seizure procedure or the other prayers, deferring them to the appellate process.

Key Issues

1. Whether the Show Cause Notices and consequential orders issued under Sections 73 and 74 of the UPGST Act, and the order under Section 130 of the UPGST Act, are liable to be quashed due to alleged illegal, arbitrary, and mala fide authorization for inspection/search and seizure? (Question of law and mixed fact and law, turning on the validity of the search and seizure authorization and subsequent proceedings). 2. Whether the authorities should be directed to consider the books of account seized during the survey and submitted physically? (Question of law, turning on procedural fairness and evidence consideration). 3. Whether the authorities should investigate the genuineness of the complaints forming the basis for the search and seizure? (Question of law, turning on due process and validity of information). 4. Whether the authorities should first decide whether the petitioner's case falls under Section 73 or Section 74 of the UPGST Act? (Question of law, turning on the correct application of statutory provisions). Petitioner's arguments: The petitioner contended that the entire proceedings were initiated based on an illegal, arbitrary, and mala fide authorization for inspection/search and seizure, lacking a proper 'reason to believe' and based on forged complaints. They sought to quash all SCNs and orders. They also prayed for directions to consider their books of account and for an investigation into the genuineness of the complaints, and for a determination of whether Section 73 or Section 74 applies. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or state respondents.