Ms/ Chauhan Associates vs. The Union Of INDIA And 3 Others
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The petitioner, M/s Chauhan Associates, filed a writ petition challenging an ex parte demand order dated 21.08.2024 issued by the Deputy Commissioner, Noida, Sector-13, Gautam Budh Nagar (B) under Section 73 of the Goods and Services Tax Act, 2017. 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 authorities acknowledged 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 ex parte demand order dated 21.08.2024 was unsustainable. Following the precedent set in M/s Hari Shanker Transport (supra), the Court found that the order failed to comply with Section 75(6) of the Goods and Services Tax Act, 2017. This section requires the proper officer to set out the relevant facts and the basis of their decision in the order. The impugned order, similar to the one in the cited case, merely made reference to the show cause notice without providing any independent reasoning or basis for its decision. The Court reasoned that even if no response was filed by the petitioner to the show cause notice, it was incumbent upon the authority to pass a self-contained order that complies with statutory requirements. The ratio decidendi is that an order passed under Section 73 of the GST Act must be a speaking order, detailing the facts and the basis of the decision, and cannot merely rely on a reference to prior notices. Consequently, the Court quashed and set aside the ex parte order and remanded the matter back to the respondent authority to provide the petitioner an opportunity to file a response to the show cause notice and thereafter pass a fresh order in accordance with law.
Key Issues
1. Whether the ex parte demand order dated 21.08.2024, issued under Section 73 of the Goods and Services Tax Act, 2017, is liable to be quashed for non-compliance with Section 75(6) of the Act? Petitioner's contention: The petitioner argued that the impugned order is unsustainable because it does not fulfill the statutory requirement of Section 75(6) of the Act, which mandates that the proper officer must set out the relevant facts and the basis of his decision in the order. The order merely incorporated the indication made in the show cause notice by reference, without providing any independent reasoning. Respondent's contention: The respondent revenue authorities attempted to support the order but did not dispute that the issue raised by the petitioner was covered by the judgment in M/s Hari Shanker Transport (supra).
Sections Cited
Section 73, Section 75(6)
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:70116-DB Chief Justice's Court Case :- WRIT TAX No. - 1978 of 2025 Petitioner :- M/s Chauhan Associates Respondent :- The Union of India and 3 others Counsel for Petitioner :- Pranjal Shukla, Parth Goswami Counsel for Respondent :- A.S.G.I., Amit Mahajan, Ankur Agarwal, S.C., Naveen Chand Gupta Hon'ble Arun Bhansali,Chief Justice Hon'ble Kshitij Shailendra,J.
This writ petition is directed against ex parte demand order dated 21.08.2024 issued by the Deputy Commissioner, Noida, Sector-13, Gautam Budh Nagar (B) under Section 73 of the Goods and Services Tax Act, 2017. 2. Learned counsel with reference to judgment in M/s Hari 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, ex parte order dated 21.08.2024 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 ex parte order dated 21.08.2024 (Annexure - 4 to the writ petition) is quashed and set aside. The matter is remanded back to respondent No.4, who shall 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. Order Date :- 2.5.2025 AKShukla/nd (Kshitij Shailendra, J) (Arun Bhansali, CJ) ANIL KUMAR SHUKLA 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.