M/S Laureate Clothing Company vs. Deputy Commissioner, State Tax -10, Noida And 2 Others
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The petitioner, M/s Laureate Clothing Company, filed a writ petition challenging a demand order dated October 17, 2023, issued by the Deputy Commissioner, State Tax, Noida. This order was passed under Section 74 of the Goods and Services Tax Act, 2017, for the tax period of September 2018. The petitioner argued that the impugned order failed to comply with the requirements of Section 75(6) of the Act, as it did not set out the relevant facts and the basis of the decision. The respondent revenue authority supported the order but 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. The Court noted that the demand order in the present case, similar to the one in the cited judgment, did not contain any reasons and incorporated the show cause notice by reference, rendering it unsustainable.
Held
The Court held that the demand order dated October 17, 2023, issued by the Deputy Commissioner, State Tax, Noida, under Section 74 of the Goods and Services Tax Act, 2017, was unsustainable. The Court found that the order, similar to the one in the cited case of M/s Hari Shanker Transport, did not contain any independent reasoning or basis for its decision. It merely incorporated the contents of the show cause notice by reference, failing to comply with the mandatory requirements of Section 75(6) of the Act. Section 75(6) mandates that the proper officer must set out the relevant facts and the basis of his decision in the order. The Court reasoned that even if no response was filed to the show cause notice, it was incumbent upon the authority to pass a self-contained order that clearly articulates the facts and the basis for the decision. Therefore, the Court quashed and set aside the demand order and remanded the matter back to the respondent authority. The petitioner was granted an opportunity to file a response to the show cause notice within four weeks, after which a fresh order in accordance with law was to be passed after providing an opportunity of hearing.
Key Issues
1. Whether the demand order dated October 17, 2023, issued under Section 74 of the Goods and Services Tax Act, 2017, is liable to be quashed and set aside for non-compliance with the mandatory requirements of Section 75(6) of the Act. Petitioner's contention: The petitioner argued that the impugned demand order fails to fulfill the statutory requirement under Section 75(6) of the GST Act, which mandates that the proper officer, in his order, shall set out the relevant facts and the basis of his decision. The order merely makes a reference to the show cause notice by incorporation, without providing an independent basis for its decision, making it unsustainable. The petitioner relied on the judgment in M/s Hari Shanker Transport Vs. Commissioner of Commercial Tax U.P. Respondent's contention: The respondent revenue authority attempted to support the impugned order but did not dispute that the issue raised by the petitioner was covered by the precedent judgment in M/s Hari Shanker Transport.
Sections Cited
Section 74, Section 75(6), Section 73, Section 61
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:86909-DB Chief Justice's Court Case :- WRIT TAX No. - 2484 of 2025 Petitioner :- M/s Laureate Clothing Company Respondent :- Deputy Commissioner, State Tax -10, Noida and 2 others Counsel for Petitioner :- Suyash Agarwal, Nitin Kumar Kesarwani Counsel for Respondent :- C.S.C., Ankur Agarwal (S.C.) Hon'ble Arun Bhansali,Chief Justice Hon'ble Kshitij Shailendra,J.
This writ petition is directed against the demand order dated 17.10.2023 issued by the Deputy Commissioner, State Tax, Sector- 10, NOIDA, Gautam Buddh Nagar under Section 74 of the Goods and Services Tax Act, 2017 for the period September, 2018. 2. Learned counsel with reference to judgment in M/s Hari Shanker Transport Vs. Commissioner of Commercial Tax U.P.: Writ Tax No.606 of 2025, decided on 11.03.2025, made submissions that the order impugned does not fulfill the requirement of Section 75(6) of the Act and, therefore, the order impugned deserves to be quashed and set aside and the matter be remanded back.
Learned counsel appearing for the respondents attempted to support the order impugned, however, does not dispute that the issue as raised is covered by the judgment in the case of M/s Hari Shanker Transport (supra).
In the case of M/s Hari Shanker Transport (supra), this Court, after hearing the parties, came to the following conclusion:- "
A bare look at the order impugned dated 27.04.2024 passed under Section 73(9) of the Act reveals that the same only makes reference to issuance of two notices, the fact that they have not been responded to, and a demand has been raised.
The manner of passing of order dated 27.04.2024 falls foul of the requirements of Section 75(6) of the Act, which requires that 'the proper officer, in his order shall set out the relevant facts and the basis of his decision', the statutory requirements for passing an order by setting out relevant facts and basis for the decision are totally missing from the order dated 27.04.2024. Even if no response was filed to the notices issued under Sections 61 and 73 of the Act, it was incumbent on respondent no.2 to pass an order in compliance of the provisions of Section 75(6) of the Act, as a final order should be self contained and merely making reference to the previous notices while passing the said order does not suffice for making it a self contained order.
Consequently, the petition is allowed. The order dated 27.04.2024 (Annexure-6 to the writ petition) is quashed and set aside. The matter is remanded back to respondent no.2/Deputy Commissioner, State Tax, Sector-3, Sonbhadra to provide an opportunity of filing response to the show cause notice issued under Section 73 of the Act to the petitioner, which response shall be filed within a period of four weeks from today and thereafter, after providing opportunity of hearing, a fresh order in accordance with law be passed."
Admittedly, in the present case, demand order dated 17.10.2023 also does not contain any reason and only the indication made in the show cause notice has been incorporated by reference and, therefore, the said order cannot be sustained.
Consequently, the writ petition is allowed.
The demand order dated 17.10.2023 (Annexure-1 to the writ petition) is quashed and set aside. The matter is remanded back to respondent no.1, who shall provide an opportunity of filing response to the show cause notice issued under Section 74 of the Act to the petitioner, which response shall be filed within a period of four weeks from today and, thereafter, after providing opportunity of hearing, a fresh order in accordance with law be passed. Order Date :- 22.5.2025 Sandeep/Sazia (Kshitij Shailendra, J) (Arun Bhansali, CJ) SANDEEP KUMAR High Court of Judicature at Allahabad
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.