M/S Rs Enterprises 1/717, Gurudwara Gali, Ramnagar, Varanasi, U.P. Through Its Partner Mr. Shailesh vs. State Of U.P. And Another

Facts

The petitioner, M/s RS Enterprises, filed a writ petition challenging a demand order dated 12.04.2024, issued by the Deputy Commissioner, State Tax, Sector-02, Varanasi, 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 respondents' counsel 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 Court noted that the order in the present case, like 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 12.04.2024, issued by the Deputy Commissioner, State Tax, Sector-02, Varanasi, was unsustainable because it failed to comply with the mandatory requirements of 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 Court found that the impugned order, similar to the order in the precedent case of M/s Hari Shanker Transport, merely incorporated the show cause notice by reference and did not contain any independent reasoning or set out the factual basis for its decision. Consequently, the Court quashed and set aside the order dated 12.04.2024. The matter was remanded back to the respondent No.2, who 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 a tax order must be self-contained and provide reasons for its decision, not merely refer to prior notices.

Key Issues

1. Whether the demand order dated 12.04.2024, issued by the Deputy Commissioner, State Tax, Sector-02, Varanasi, 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 contended 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. The order merely refers to the show cause notice by incorporation and lacks any independent reasoning, 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 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 judgment in M/s Hari Shanker Transport (supra).