M/S Ma Sharda Enterprises vs. State Of U.P. And Another
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The petitioner, M/s Ma Sharda Enterprises, filed a writ petition challenging a demand order dated 03.02.2024 and a show cause notice dated 26.12.2023, both issued by the Commissioner Tax Officer, State Tax, Kaushambi Sector, Prayagraj. The challenge was based on the argument that the impugned order failed to comply with Section 75(6) of the State Goods and Services Tax Act, 2017, by not setting out the relevant facts and the basis of the decision. The respondents, State of U.P. and Another, were represented by counsel. The court noted that the impugned order in the present case, similar to a previous case, did not contain any reasons and incorporated the show cause notice by reference.
Held
The Court held that the demand order dated 03.02.2024, along with the show cause notice dated 26.12.2023, was unsustainable. The reasoning was that the order, similar to the one in the cited case of M/s Hari Shanker Transport, 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 provisions of Section 75(6) of the State Goods and Services Tax Act, 2017. The Court found that even if no response was filed to the notices, it was incumbent upon the respondent to pass an order that was self-contained and complied with the statutory requirements. The ratio decidendi is that an order passed under Section 73 of the Act must be reasoned and self-contained, setting out the factual basis for the decision, and mere reference to previous notices is insufficient. Consequently, the Court quashed and set aside the impugned order and show cause notice and remanded the matter back to the respondent for providing the petitioner an opportunity to file a response to the show cause notice within four weeks, followed by a hearing and a fresh order in accordance with law.
Key Issues
1. Whether the demand order dated 03.02.2024, issued under Section 73 of the State Goods and Services Tax Act, 2017, is liable to be quashed and set aside for non-compliance with the requirements of Section 75(6) of the Act. Petitioner's contention: The petitioner argued that the impugned order fails to fulfill the mandatory requirements of Section 75(6) of the Act, which mandates that the proper officer shall, in his order, set out the relevant facts and the basis of his decision. They relied on the 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) to support their claim that the order was not self-contained and lacked the necessary factual basis. Respondent's contention: The counsel for the respondents attempted to support the impugned order but did not dispute that the issue raised was covered by the judgment in M/s Hari Shanker Transport (supra).
Sections Cited
Section 73, Section 75(6), Section 61
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:68138-DB Chief Justice's Court Case :- WRIT TAX No. - 1934 of 2025 Petitioner :- M/S Ma Sharda Enterprises Respondent :- State of U.P. and Another Counsel for Petitioner :- Pranjal Shukla, Amit Yadav, Parth Goswami Counsel for Respondent :- Ankur Agarwal (S.C.) Hon'ble Arun Bhansali,Chief Justice Hon'ble Vikas Budhwar,J.
This writ petition is directed against the demand order dated 03.02.2024 and show cause notice dated 26.12.2023 issued by the Commissioner Tax Officer, State Tax, Kaushambi Sector, Prayagraj (B) Prayagraj, respondent no. 2 under Section 73 of the State Goods and Services Tax Act, 2017. 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, the order dated 03.02.2024 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 order dated 03.02.2024 and show cause notice dated 26.12.2023 (Annexures-5 & 3 to the writ petition) are quashed and set aside. The matter is remanded back to respondent no.2, 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 :- 30.4.2025 Shiraz/SL (Vikas Budhwar, J) (Arun Bhansali, CJ) SHIRAZ ALI 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.