M/S V.S. Enterprises vs. State Of U.P. And 2 Others
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M/s V.S. Enterprises (the petitioner) filed a writ petition challenging three adjudication orders, all dated June 9, 2021, passed by respondents nos. 2 and 3. The petitioner contended that for a single tax period and a single dispute, only one adjudication order can be passed. Notices under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017, were issued for overlapping periods: September 2017 to December 2017 and July 2017 to March 2018 by respondent no. 2, and November 2017 by respondent no. 3. The petitioner also argued that orders were passed without due opportunity, particularly in light of government notifications extending reply submission deadlines due to the COVID-19 pandemic. The Revenue conceded that three orders for overlapping periods were issued due to a bona fide mistake, and respondent no. 2 had jurisdiction.
Held
The Court held that the issuance of three adjudication orders for overlapping tax periods and a single dispute was impermissible. The Court found that the order dated June 9, 2021, passed by respondent no. 2 for the period July 2017 to March 2018, arose from proceedings initiated by notice dated December 22, 2020. This order was set aside because the petitioner could not participate due to the COVID-19 pandemic, and the order was passed ex-parte without affording due opportunity, especially considering the government's extension of reply submission deadlines. The Court quashed the orders dated June 9, 2021, passed by respondent no. 2 for September 2017 to December 2017 and by respondent no. 3 for November 2017. The matter concerning the order for July 2017 to March 2018 was remitted to respondent no. 2 for a fresh adjudication order after providing the petitioner a reasonable opportunity of being heard, with the petitioner directed to file a reply within one month, not later than August 31, 2021. The ratio decidendi is that multiple adjudication orders for the same tax period and dispute are invalid, and ex-parte orders passed without affording due opportunity, especially during a pandemic-induced extension of deadlines, are liable to be set aside.
Key Issues
1. Whether the issuance of three separate adjudication orders for overlapping tax periods and a single dispute is permissible under the Uttar Pradesh Goods and Services Tax Act, 2017, and consequently, whether the impugned orders are without jurisdiction? (Section 74) 2. Whether the adjudication orders passed on June 9, 2021, were validly passed, considering the petitioner was not afforded a reasonable opportunity of being heard, especially in light of government notifications extending reply submission deadlines due to the COVID-19 pandemic? Petitioner's Arguments: The petitioner argued that the scheme of the UP GST Act permits only one adjudication order per tax period. The issuance of multiple notices for overlapping periods and subsequent orders by different authorities for the same dispute are without jurisdiction. They also contended that orders were passed before the extended reply submission deadline lapsed, as per Government Notification dated May 1, 2021. Revenue's Arguments: The Revenue conceded that three orders were issued for overlapping periods due to a bona fide mistake. They submitted that respondent no. 2 had and continues to have the jurisdiction to adjudicate the matter properly.
Sections Cited
Section 74
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Cause title — parties, addresses and appearances
only be a single adjudication order. Upon such submissions, writ petition was entertained by order dated 14.7.2021. It reads as below: "Heard learned counsel for the petitioner and learned Standing Counsel for the responders. Submission of learned counsel for the petitioner is that under scheme of the UP GST Act only one order of adjudication could have been passed for a tax period. In the present case, three notices have been issued for overlapping period which are wholly without juri iction. Simultaneously, orders have been passed in all three cases by two different authorities which again are wholly without juri iction. Reference has also been made to the Government Notification dated 01.05.2021. He submits that in any case no order could have been passed till the date to furnish reply as extended by the aforesaid notification had lapsed. Matter requires consideration. Sri C.P. Tripathi, learned Standing Counsel prays for and is granted 10 days time to complete the instructions. Put up in the additional cause list on 29.07.2021. In the meanwhile, no coercive measures shall be adopted against the petitioner in pursuance to the impugned order dated 09.06.2021 (Annexrue nos. 3, 6 and 10 to the writ petition) passed by the respondent nos.2 and 3." Today, on instructions, Shri Ghildyal submits that on account of the bona fide mistake committed, three orders came into existence, however, it is respondent no.2 who had and continues to have juri iction to make proper adjudication. In view of the fair statement made by learned counsel for the Revenue, no useful purpose would be served in keeping the present petition pending or calling for counter affidavit. Undisputedly, three periods for which the orders had been passed are overlapping. Notice dated 22.12.2020 was issued by respondent no.2 for the period July 2017 to March 2018. It covers the entire period and dispute being sought to be adjudicated in the other two notices as well. At the same time, we find that by notice dated 22.12.2020, next date fixed was 05.01.2021 but the petitioner could not participate in the same on account of the spread of pandemic COVID-19. Also, in that regard, it has been brought to our notice that realizing the difficulties from the spread of pandemic COVID-19, the Government had itself issued an order dated 01.05.2021 extending the period to submit reply and responses, up to 30.05.2021. Subsequently, it was extended up to 30.06.2021. In light of that fact, the order dated 09.06.2021 is clearly an ex-parte order, which has been passed without allowing due opportunity of hearing to the petitioner. In view of the above, present writ petition is disposed of with the following terms: (i) the orders dated 9.6.2021 passed by respondent no.2 for the period September 2017 to December 2017 and the order dated 9.6.2021 passed by respondent no.3 for the period November 2017 are quashed. (ii) So far as the order dated 9.6.2021 passed by respondent no. 2 for the period July 2017 to March 2018 is concerned, the same arises from the proceedings initiated by notice dated 22.12.2020. That order dated 9.6.2021 is set aside and the matter remitted to respondent no.2 to pass a fresh adjudication order after affording the petitioner reasonable opportunity of being heard. However, it is provided that the petitioner shall file his reply to the notice dated 22.12.2020 within a period of one month from today, not later than 31 August 2021. Further proceedings may be conducted and concluded strictly in accordance with law. Order Date :- 29.7.2021 Prakhar
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.