M/S Ajnara Realtech Limited vs. State Of Uttar Pradesh And 3 Others
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The petitioner, M/s Ajnara Realtech Limited, filed a writ petition challenging a Show Cause Notice (SCN) dated June 3, 2024, and an ex parte order dated February 3, 2025, both issued by the Commissioner, State GST, Khand-I, Gautam Budh Nagar (respondent no.3). These actions were taken for the Financial Year 2017-18 under Section 74 of the GST Act. The petitioner argued that the SCN and the subsequent order lacked the necessary ingredients of fraud, willful misstatement, or suppression of material facts, as required by Section 74. Furthermore, the petitioner contended that the SCN was issued without jurisdiction and was contrary to a moratorium declared by the NCLT on April 15, 2024. The SCN and the order were also alleged to be bad in law, violative of the doctrine of double jeopardy, and barred by res judicata.
Held
The Court held that the Show Cause Notice dated June 3, 2024, and the subsequent ex parte order dated February 3, 2025, both issued under Section 74 of the GST Act for FY 2017-18, were bad in law. The Court found that the SCN did not contain the necessary allegations of fraud or willful misstatement/suppression of material facts, which are prerequisites for invoking Section 74. The subsequent order was also found to be bereft of reasons and did not comply with the essential ingredients of the said section. Relying on the precedent set in HCL Infotech Ltd. vs. Commissioner, Commercial Tax, the Court quashed and set aside both the SCN and the order. The authority was granted liberty to proceed in accordance with the law, implying that if they wished to proceed, they must issue a fresh notice or order that correctly adheres to the statutory requirements of Section 74.
Key Issues
1. Whether the Show Cause Notice dated June 3, 2024, issued under Section 74 of the GST Act for FY 2017-18, is bad in law for failing to allege fraud, willful misstatement, or suppression of material facts, thereby violating the ingredients of Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017? 2. Whether the ex parte order dated February 3, 2025, passed under Section 74 of the UPGST Act, 2017, for FY 2017-18, is liable to be quashed for being bereft of reasons and not complying with the ingredients of Section 74? Petitioner's Arguments: The petitioner argued that the impugned SCN and the subsequent order failed to adhere to the essential ingredients of Section 74 of the GST Act, specifically the absence of any allegation of fraud, willful misstatement, or suppression of material facts. They also contended that the SCN was issued without jurisdiction, contrary to a NCLT moratorium, and was barred by principles of double jeopardy and res judicata. The petitioner relied on the judgment in HCL Infotech Ltd. vs. Commissioner, Commercial Tax (2024) 23 Centax 71 (All.). Respondent's Arguments: No specific arguments were recorded for the respondent in the provided judgment excerpt.
Sections Cited
Section 74
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:38761-DB Court No. - 40 Case :- WRIT TAX No. - 354 of 2025 Petitioner :- M/S Ajnara Realtech Limited, Respondent :- State Of Uttar Pradesh And 3 Others Counsel for Petitioner :- Suyash Agarwal,Sr. Advocate Counsel for Respondent :- C.S.C.,Gaurav Mahajan Hon'ble Shekhar B. Saraf,J. Hon'ble Kshitij Shailendra,J.
Heard Sri Suyash Agarwal, learned counsel appearing on behalf of the petitioner and Sri Gaurav Mahajan, learned counsel appearing on behalf of the respondent no.4. 2. This is a writ petition under Article 226 of the Constitution of India wherein the writ petitioner has made the following prayers:- "(i) Issue a writ of certiorari or any other writ, order or direction quashing the Impugned SCN dated 03.06.2024, issued under Section 74 of the GST Act by the Commissioner State GST, Khand-I, Gautam Budh Nagar respondent no.3, for F.Y. 2017-18, being bad in law, violative of the doctrine of double jeopardy, barred by res judicata, issued without juri iction and being contrary to moratorium declared vide NCLT Order dated 15.04.2024. (Annexure-1). (ia) Issue writ order or direction in the nature of certiorari quashing impugned ex parte order dated 03.02.2025 passed by the respondent no.3 for FY 2017-18 passed u/s 74 of the UPGST Act 2017. (ANNEXURE-16). (ii) Issue writ, Order or direction in the nature of Prohibition restraining the respondent no.3, from proceeding with the SCN dated 03.06.2024, issued u/s 74 of the GST Act for F.Y. 2017-18. (iii) Issue a writ, order or direction of similar nature which this Hon'ble Court may deem fit in the facts and circumstances of the present case in the interest of justice, equity and good conscience; (iv) Award cost of litigation in favour of the Petitioner;"
Upon a perusal of the show cause notice, it is clear that ingredients of Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the 'Act') have not been adhered to, as there is no allegation of fraud or any willful- misstatement and/or suppression of material facts in the said show Order Date :- 18.3.2025 Dev (Kshitij Shailendra,J.) (Shekhar B. Saraf,J.) DEV PRAKASH 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.