Kishor Shrikrushna Dabhade vs. Deputy Commissioner Of State Tax And Anr

Held

The Court held that the impugned order dated February 5, 2025, was liable to be set aside as it suffered from the vice of being a non-speaking order and had not taken into consideration the legal and factual submissions made by the Petitioner. The Court found that the Respondent No. 1 had not properly considered the Petitioner's contentions regarding the pre-GST nature of the transaction and the principles of natural justice. The ratio decidendi is that an order passed without considering the submissions of the party and without providing proper reasoning is unsustainable in law. The Court quashed and set aside the impugned order and remanded the proceedings to Respondent No. 1 for de novo consideration. Respondent No. 1 was directed to issue a fresh show cause notice, provide a personal hearing to the Petitioner, and pass a reasoned speaking order within specified timelines. All contentions of the parties were expressly kept open.

Facts

The Petitioner, Kishore Shrikrushna Dabhade, entered into a Joint Development Agreement on March 11, 2011, with M/s. Omkar Developers. A dispute arose, leading to a Special Civil Suit filed by the Petitioner between 2015-2017. A compromise was reached, formalized by a Supplementary Agreement on September 22, 2017, and a Civil Court decree on May 19, 2018, recognizing the settlement and transferring title. On January 13 and 17, 2025, show cause notices were issued to the Petitioner demanding GST on the 2011 Joint Development Agreement. Respondent No. 1, the Deputy Commissioner of State Tax, Pune, passed an order on February 5, 2025, demanding Rs. 6,30,86,279/- from the Petitioner, allegedly disregarding the Petitioner's submissions and imposing GST on pre-GST regime transactions. The Petitioner filed a writ petition challenging this order.

Key Issues

1. Whether the Respondent No. 1 had the jurisdiction to call for records and adjudicate on transactions executed prior to the GST regime, as per Article 226 of the Constitution of India and the relevant GST provisions? The Petitioner argued that the impugned order was passed without jurisdiction, as it sought to impose GST on transactions that occurred before the introduction of the GST regime. The Petitioner contended that the impugned order was a non-speaking order and passed in gross violation of the principles of natural justice, and that it went beyond the scope of the show cause notice. The Petitioner also pointed out that the demand against the Developer for the same transaction had been dropped. The Revenue (Respondent No. 1) argued that the impugned order was a well-reasoned and speaking order and therefore not liable to be set aside.