M/S Suyash Steel vs. State Of U.P. And 2 Others

Facts

The petitioner, M/s Suyash Steel, filed a writ petition challenging notices dated 13.11.2020 and 21.12.2020, and the proceedings initiated under Section 74 of the U.P. Goods and Services Tax Act, 2017. The respondent authorities issued these notices. The petitioner sought quashing of the notices and proceedings, and a direction to prevent coercive action. The respondent's counsel conceded that the brief facts and grounds for the notice dated 21.12.2020 were not uploaded due to a technical fault, preventing the petitioner from replying. The respondent stated that the necessary documents would be supplied within ten days, and no order would be passed on the DRC no.01 dated 21.12.2020 until then.

Held

The Court held that the notice dated 21.12.2020 was procedurally flawed because the grounds and basis for initiating proceedings were not communicated to the petitioner, hindering their ability to file a reply. This violated the principles of natural justice. The Court noted the respondent's concession regarding the technical fault that led to the non-uploading of crucial documents. Consequently, the Court directed the respondents to supply the requisite papers to the petitioner within ten days of the order. The petitioner was then granted two weeks to submit their reply. After considering the petitioner's reply, the respondent authority was to make a decision within one week. Until a final decision was taken, no recovery proceedings were to be initiated against the petitioner pursuant to the impugned notice dated 13.11.2020. The Court did not decide on the merits of the case but focused on the procedural deficiency.

Key Issues

1. Whether the notice dated 21.12.2020, issued under Section 74(1) of the U.P. Goods and Services Tax Act, 2017, is valid when the grounds and basis for initiating proceedings were not communicated to the petitioner, thereby violating the principles of natural justice? Petitioner's Contention: The petitioner argued that the impugned notices were liable to be quashed as they lacked the necessary grounds and basis, preventing them from filing a proper reply, and that the entire proceedings under Section 74 of the Act were therefore vitiated. They sought a writ of certiorari to quash the notices and proceedings, and a writ of mandamus to prevent coercive action. Respondent's Contention: The respondent argued that the notice dated 13.11.2020 was an opinion to comply with Section 74(5) of the Act, and the notice dated 21.12.2020 was issued, against which the petitioner had an alternative remedy. However, they conceded that the grounds and brief facts were not uploaded due to a technical fault and undertook to supply them within ten days.