M/S Aryan Associates Thru. Proprietor Keerti Awasthi vs. State Of U.P. Thru. Prin. Secy. Deptt. Of State Tax Lko. And Another

Held

The Court held that the impugned order dated August 21, 2024, passed under Section 73 of the CGST/SGST Act, was unsustainable in law due to a gross violation of the fundamental principles of natural justice. The Court relied on the principles laid down in the coordinate Bench judgment of Mahaveer Trading Company vs. Deputy Commissioner State Tax. The reasoning was that the authorities failed to issue a proper show cause notice and did not provide an adequate opportunity for personal hearing. The Court acknowledged that the writ petition was filed after the statutory limitation period for appeal but intervened due to the exceptional circumstance of a violation of natural justice. The Court quashed and set aside the ex-parte order and permitted the Department to issue a fresh show cause notice and proceed in accordance with the law. The issue of the alternative remedy being barred by limitation was considered, but the Court found it would be counterproductive to the interest of justice in this case.

Facts

The writ petitioner, M/S Aryan Associates, challenged an order dated August 21, 2024, passed by the Commercial Tax Officer, State Tax, Sector-11 Lucknow, under Section 73 of the CGST/SGST Act. The petitioner argued that the initial show cause notice was improper, leading to a flawed proceeding. Specifically, the date of reply to the show cause notice was June 25, 2024, while 'NA' was mentioned for the date of personal hearing. The petitioner contended that this procedural defect rendered the entire initiation and subsequent order invalid. The Court considered the procedural history, including the issuance of the impugned order and the filing of the writ petition.

Key Issues

1. Whether the impugned order dated August 21, 2024, passed under Section 73 of the CGST/SGST Act, is liable to be quashed on the grounds of violation of principles of natural justice, specifically concerning the lack of a proper personal hearing and an improper show cause notice? Petitioner's Arguments: The petitioner argued that the entire initiation of proceedings was flawed due to an improper first show cause notice. They contended that the mention of 'NA' for the date of personal hearing, while a reply date of June 25, 2024, was provided, indicated a failure to grant a proper opportunity for personal hearing. Therefore, any proceeding taken under such defective notice is bad in law. Revenue's Arguments: The judgment does not record any specific arguments made by the respondent revenue authorities.