Utc Softech P. LTD. vs. State Of U.P. And Another

Facts

The petitioner, Utc Softech P. Ltd., is challenging an ex-parte order passed by the Deputy Commissioner (Respondent No. 2). The petitioner claims that a notice dated January 25, 2023, in Form GST DRC-01 under Rule 142(1) of the CGST Act, was never served upon them. Consequently, an ex-parte order was issued imposing a penalty of Rs. 19,72,76,879/-. The High Court observed that the order under challenge appeared to be ex-parte.

Held

The Court held that the order impugned appeared to be ex-parte. Prima facie, since the order was passed without affording the petitioner an opportunity of hearing, it was liable to be set aside. The Court reasoned that principles of natural justice mandate that a party must be given due notice and an opportunity to be heard before an adverse order is passed against them. The ratio decidendi is that an ex-parte order passed without proper service of notice and opportunity of hearing is unsustainable. The Court set aside the impugned ex-parte order and remanded the matter back to the Deputy Commissioner (Respondent No. 2) to pass fresh orders after providing due notice and an opportunity of hearing to the petitioner. The Court also expressed an expectation that the petitioner would cooperate in the proceedings and avoid unnecessary adjournments.

Key Issues

1. Whether the ex-parte order dated 25.01.2023, imposing a penalty of Rs. 19,72,76,879/-, is liable to be set aside on the ground of non-service of notice under Rule 142(1) of the CGST Act? Petitioner's Contention: The petitioner argued that the impugned order is ex-parte and was passed without proper service of the notice in Form GST DRC-01, violating principles of natural justice. Respondent's Contention: The judgment does not record any specific arguments or contentions made by the respondent (State of U.P. and Another).