M/S M R Traders vs. State Of Uttar Pradesh And Another
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The petitioner, M/s M R Traders, filed a writ petition challenging an ex-parte demand order dated 23.12.2023, issued by the Deputy Commissioner, State Tax, Ghaziabad, 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, merely referencing the show cause notice. The respondent, State of Uttar Pradesh, initially attempted to support 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 procedural history involves the issuance of the ex-parte demand order without providing the petitioner with an adequate opportunity to respond, leading to this writ petition.
Held
The Court held that the ex-parte demand order dated 23.12.2023 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 complies with statutory provisions. 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 refer to previous notices. Consequently, the Court quashed and set aside the ex-parte demand order and remanded the matter back to the respondent. The respondent 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.
Key Issues
1. Whether the ex-parte demand order dated 23.12.2023, issued under Section 73 of the Goods and Services Tax Act, 2017, is liable to be quashed and set aside for non-compliance with Section 75(6) of the Act. Petitioner's Contention: The petitioner argued that the impugned order is unsustainable as it fails to fulfill the mandatory requirements of Section 75(6) of the Act. This provision mandates that the proper officer, in their order, must set out the relevant facts and the basis of their decision. The petitioner contended that the order in question merely makes a reference to the show cause notice without providing any independent reasoning or factual basis, rendering it deficient. They relied on the judgment in M/s Hari Shanker Transport Vs. Commissioner of Commercial Tax U.P. to support their claim. Respondent's Contention: The respondent's counsel 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.
Sections Cited
Section 73, Section 75(6)
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:51574-DB Chief Justice's Court Case :- WRIT TAX No. - 1524 of 2025 Petitioner :- M/s M R Traders Respondent :- State of Uttar Pradesh and another Counsel for Petitioner :- Alok Bhai Patel,Niraj Kumar Singh Counsel for Respondent :- S.C., Ankur Agarwal Hon'ble Arun Bhansali,Chief Justice Hon'ble Kshitij Shailendra,J.
This writ petition is directed against the ex-parte demand order dated 23.12.2023 issued by the Deputy Commissioner, State Tax, Sector-10, Ghaziabad U.P. under Section 73 of the Goods and Services Tax Act, 2017. 2. Learned counsel with reference to judgment in M/s Hari : 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 ex-parte demand order dated 23.12.2023 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 ex-parte demand order dated 23.12.2023 (Annexure-7 to the writ petition) is 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 :- 9.4.2025 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.