Rajesh Kumar Singh vs. Commissioner Of Commercial Tax Up Lucknow And Another

This petition is directed against order dated 09.10.2024 (Annexure - 1) passed under Section 161 of the GST Act, 2017 ('the Act') and order dated 30.04.2024 (Annexure - 8) passed under Section 73(9) of the Act.

It is inter-alia indicated in the petition that the petitioner is involved in the business of transport of goods and cargo services and is a Goods Transport Agency (GTA), which is registered under the provision of the Act. For the tax period April, 2018 to March, 2019, the return of the petitioner was scrutinized by the department and a notice under Section 61 of the Act intimating discrepancies in the return after scrutiny was issued. Petitioner was required to submit his reply by 22.02.2023. However, personal hearing in this regard was denied in the notice.

Whereafter notice was issued under Section 73(1) of the Act on 23.12.2023 indicating the difference in the amount of Input Tax Credit (ITC) for the tax period April, 2018 to March, 2019. In the show cause notice, the date indicated by which reply was to be submitted was 20.01.2024 and date of personal hearing was also fixed on the same date.

The petitioner filed his reply on 18.01.2024 to the show cause notice inter-alia indicating that in the case of petitioner, the tax is 2 charged on Reverse Charge Mechanism (RCM) wherein the tax is to be paid by the recipient of the service and filed the relevant tax invoices of the transactions.

The respondent no. 2 passed order dated 30.04.2024 under Section 73(9) of the Act partly accepting the reply furnished by the petitioner.

The petitioner filed an application under Section 161 of the Act seeking rectification of the error apparent on the fact of record relying on the fact that the transactions were governed by RCM, however, the application was rejected by order dated 09.10.2024. Feeling aggrieved, the present petition has been filed.

Learned counsel for the petitioner made submissions that the transaction entered into by the petitioner, are governed by RCM and specific reply in this regard along with documents was filed. No opportunity of hearing was provided and the said aspect was not dealt with by the respondent.

Submission has been made that besides the fact that the order impugned is vitiated on account of violation of principle of natural justice, a bare perusal of the order dated 30.04.2024 would reveal that the same is absolutely non speaking and does not even deal with the issue as raised in reply to the show cause notice and therefore, the order impugned deserves to be quashed and set aside.

Learned counsel for the respondent supported the action impugned. Submission has been made that notice under Section 61 of the Act was issued, which was not responded to by the petitioner and in a proceeding under Section 161 of the Act, grant of opportunity of hearing in a matter like present wherein the petitioner was seeking review of the order dated 30.04.2024, no opportunity of hearing was required to be granted as the application itself was beyond the scope of rectification.

Submission has been made that the authority has appropriately dealt with the reply to the show cause notice and as such, no interference is called for in the order impugned.

We have considered the submissions made by counsel for the parties and perused the material available on record.

A bare look at the show cause notice issued under Section 73 of the Act (Annexure - 5) would reveal that date of filing of reply and date of personal hearing are the same i.e. 20.01.2024. This Court has repeatedly frowned on the action of the respondents in fixing identical date of reply and date of hearing, as the same apparently is an empty formality and essentially results in violation of principle of natural justice.

Besides the above, the reply to the show cause notice filed by the petitioner was specific relying on RCM, however, in the order dated 30.04.2024, the respondent no. 2 did not deal with the said aspect at all and a wholly cursory finding, as under, has been recorded : "O;kikjh }kjk nkf[ky mRrj dk ifj'khyu fd;k x;kA O;kikjh dk mRrj dfri; fcUnqvksa ij Lohdkj ;ksX; ik;k x;k] fdUrq fcUnq la0 3] 5 o 10 ds lEcU/k esa O;kikjh dk mRrj Lohdkj ;ksX; ugha ik;k x;k] D;ksfd O;kikjh ds }kjk vius mRrj esa lIykbZ ,xsUlV vkjlh,e :0 71595250-38 ?kksf"kr fd;k x;k gSA fdUrq mDr ij vkjlh,e ls dj tek ds lEcU/k esa dksbZ lk{; izLrqr fd;k u gh ys[kk iqLrdksa ls lR;kiu djk;k x;kA tks fd xqM~l o lfoZl V l vf/kfu;e 2017 esa thVh, ds vUrxZr dj ;ksX; gSA vr% mDr Hkqxrku dks thVh, ds vUrxZr lfoZlst ekurs gq, djkjksi.k fd;k tk;sxkA O;kikjh ds }kjk 26,,l ds vUrj ds lEcU/k esa Hkh dksbZ larks"ktud mRrj lk{;ksa lfgr ugha izLrqr fd;k x;kA"

It would be seen that show cause notice was issued on 10 points and while on 7 points, the same was accepted, that also without indicating any reason, on 3 points only a cursory observation has been made that no evidence has been produced pertaining to deposit of tax through RCM and the accounts books have not been verified. Such a cursory disposal of the objection raised in reply to the show

In view of above fact situation, wherein besides non granting of opportunity of hearing, the order impugned i.e. 30.04.2024 passed, is wholly cursory, the same cannot be sustained.

So far as the challenge laid to order passed under Section 161 of the Act rejecting the rectification application is concerned, in view of the fact that the order dated 30.04.2024 itself has been found to be vitiated, rejection of the said application under Section 161 of the Act loses its significance.

Consequently, the petition is allowed. The order impugned dated 30.04.2024 passed under Section 79(3) of the Act (Annexure - 8 to the writ petition) is quashed and set aside.

The matter is remanded back to the Deputy Commissioner, State Tax, Mirzapur for deciding the matter afresh after providing opportunity of hearing to the petitioner. Order Date :- 19.2.2025 nd (Kshitij Shailendra, J) (Arun Bhansali, CJ) NISITH DEY High Court of Judicature at Allahabad