M/S Ashu Pharma, Thru.Proprietor Ravindra Kumar vs. State Of U.P. Thru. Prin. Secy. Deptt. Of State Tax Lko. And Another

Held

The Court held that the principles of natural justice were violated in the present case, aligning with the reasoning in the Mahaveer Trading Company judgment. The Court found that the show cause notice issued at the initiation stage was flawed. Consequently, it was incumbent upon the authorities to issue a fresh show cause notice in accordance with the law. Since this was not done, the Court concluded that the principles of natural justice had been contravened. Despite the writ petition being filed after the statutory limitation period for filing an appeal, the Court decided to intervene due to the exceptional circumstances of a violation of natural justice. The ex-parte order dated April 19, 2024, was therefore quashed and set aside. The Department was granted liberty to issue a fresh show cause notice and proceed in accordance with the law. The Court expressly noted that the appeal authority does not have the authority to remand proceedings, but in this writ, the Department was permitted to issue a fresh notice.

Facts

The petitioner, M/S Ashu Pharma, filed a writ petition challenging an order dated April 19, 2024, passed by the Assistant Commissioner, State Tax, Lucknow, under Section 73 of the CGST/SGST Act. The petitioner argued that the initial show cause notice was improper, and the subsequent proceedings were therefore invalid. Specifically, the petitioner noted that the date for submitting a reply was January 20, 2024, while the date for personal hearing was mentioned as 'NA' (Not Applicable). The petitioner contended that this constituted a violation of natural justice principles, as a proper notice was not issued. The High Court considered the arguments and the procedural history of the case.

Key Issues

1. Whether the impugned order dated April 19, 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 due to improper notice and denial of personal hearing? Petitioner's Contention: The petitioner argued that the entire initiation of proceedings was flawed because the first show cause notice was improper. They specifically highlighted that the date of reply was January 20, 2024, while the personal hearing date was indicated as 'NA'. This, according to the petitioner, meant that the authorities had not issued a proper notice, rendering all subsequent proceedings bad in law. The petitioner relied on the judgment in Mahaveer Trading Company vs. Deputy Commissioner State Tax. Respondent's Contention: The judgment does not record any specific arguments made by the respondent (State of U.P. Thru. Prin. Secy. Deptt. Of State Tax Lko. And Another).