M/S A.K. Infrastructure vs. State Of U.P. And Another

Facts

The petitioner, M/s A.K. Infrastructure, filed a writ petition challenging a demand order dated 24.04.2024, issued by the Commercial/State Tax Officer, State Tax, Sector-7, Saharanpur. This order was passed under Section 73 of the Goods and Services Tax Act, 2017, for the Financial Year 2018-19. The petitioner argued that the impugned order failed to comply with the requirements of Section 75(6) of the Act. The respondent authorities, while attempting to support the order, did not dispute that the issue was covered by a previous judgment of the Court in M/s Hari Shanker Transport Vs. Commissioner of Commercial Tax U.P.

Held

The Court held that the demand order dated 24.04.2024, issued by the Commercial/State Tax Officer, State Tax, Sector-7, Saharanpur, was unsustainable. The Court found that, similar to the facts in the case of M/s Hari Shanker Transport, the impugned order did not contain any reasons and merely incorporated the indication made in the show cause notice by reference. This failure to set out the relevant facts and the basis of the decision contravened the mandatory requirements of Section 75(6) of the Goods and Services Tax Act, 2017. The Court reasoned that even if no response was filed to the show cause notice, it was incumbent upon the proper officer to pass a self-contained order that complied with statutory provisions. Consequently, the Court quashed and set aside the order dated 24.04.2024 and remanded the matter back to the respondent No.2. The respondent No.2 was directed to provide the petitioner an opportunity to file a response to the show cause notice within four weeks and thereafter pass a fresh order in accordance with law after providing an opportunity of hearing. The ratio decidendi is that an order passed under Section 73 of the GST Act must comply with Section 75(6) by stating the relevant facts and the basis of the decision, and cannot merely refer to previous notices.

Key Issues

1. Whether the demand order dated 24.04.2024, issued under Section 73 of the Goods and Services Tax Act, 2017, is sustainable in light of Section 75(6) of the Act? Petitioner's contention: The petitioner argued that the impugned order does not fulfill the requirements of Section 75(6) of the Act, which mandates that the proper officer shall set out the relevant facts and the basis of his decision in the order. They relied on the judgment in M/s Hari Shanker Transport Vs. Commissioner of Commercial Tax U.P. to support their claim that the order should be quashed and the matter remanded. Respondent's contention: The learned counsel for the respondents attempted to support the impugned order but did not dispute that the issue raised by the petitioner was covered by the aforementioned judgment in M/s Hari Shanker Transport.