Greenfinch Team Management (P) LTD vs. Department Of Commercial Taxes And Another
Facts
The petitioner, Greenfinch Team Management (P) Ltd, filed a writ petition challenging a show cause notice dated June 11, 2022, and an order dated December 10, 2022, passed by respondent No. 2 under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner contended that they were not afforded an opportunity of hearing, violating Section 75(4) of the Act. Furthermore, the demand raised in the order, ₹39,70,42,000/-, significantly exceeded the proposed demand of ₹32,60,000/- mentioned in the show cause notice, contravening Section 75(7) of the Act. While the respondents disputed the lack of hearing, they did not dispute the discrepancy in the demand amount.
Held
The Court held that the impugned order dated December 10, 2022, deserves to be set aside. The reasoning was based on two primary grounds: firstly, the violation of Section 75(7) of the Act, as the demand raised in the order (₹39,70,42,000/-) was significantly higher than the demand proposed in the show cause notice (₹32,60,000/-). Secondly, the Court noted the petitioner's contention regarding the violation of Section 75(4) concerning the opportunity of hearing, which, coupled with the substantial discrepancy in the demand, led to the decision. The ratio decidendi is that a demand raised in an adjudication order cannot exceed the demand proposed in the show cause notice, and adequate opportunity of hearing must be provided. The Court set aside the impugned order and granted liberty to the respondents to pass a fresh order after affording an opportunity of hearing to the petitioner. No issue was expressly left undecided.
Key Issues
1. Whether the impugned order dated December 10, 2022, passed by respondent No. 2 is liable to be set aside for violation of Section 75(4) of the Uttar Pradesh Goods and Services Tax Act, 2017, by not affording an adequate opportunity of hearing to the petitioner? 2. Whether the demand raised in the impugned order, ₹39,70,42,000/-, is invalid as it exceeds the demand proposed in the show cause notice dated June 11, 2022, thereby violating Section 75(7) of the Uttar Pradesh Goods and Services Tax Act, 2017? Petitioner's arguments: The petitioner argued that the order was passed in violation of Section 75(4) of the Act due to a lack of opportunity of hearing. They also contended that the demand raised in the order, ₹39,70,42,000/-, was substantially higher than the ₹32,60,000/- proposed in the show cause notice, which is impermissible under Section 75(7) of the Act. Respondents' arguments: The respondents disputed the claim that an opportunity of hearing was not provided. However, they did not dispute the fact that the demand raised in the impugned order was more than what was proposed in the show cause notice.
Sections Cited
Section 74, Section 75(4), Section 75(7)
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Cause title — parties, addresses and appearances
The writ petitioner has filed the present writ petition challenging the show cause notice dated June 11, 2022 and the order dated December 10, 2022 passed by respondent No.2 under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the "Act").
Learned counsel for the petitioner submitted that before passing the aforesaid order, opportunity of hearing was not afforded to the petitioner, which is in violation of Section 75(4) of the Act. He further referred to Section 75(7) of the Act, in terms of which the demand could not be raised more than what was mentioned in the show cause notice. As per the show cause notice, the proposed demand was of ₹32,60,000,00/- whereas in the order passed, the demand raised is of ₹39,70,42,000/-.
Though learned counsel for respondents disputed the fact that opportunity of hearing was not sought for by the petitioner, however, the fact that the demand raised vide impugned order was more than what was proposed in the show cause notice could not be disputed. Chief Justice's
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