M/S Aditya Infratech Lko. Thru. Its Proprietor Sushil Kumar Rawat vs. State Of U.P. Thru. Prin. Secy. Deptt. Of State Tax Lko. And 2 Others

Facts

The petitioner, M/s Aditya Infratech Lko., through its Proprietor Sushil Kumar Rawat, challenged two orders. The first order, dated 01.04.2024, was passed under Section 73 of the GST Act. The second order, dated 20.01.2025, dismissed the petitioner's appeal as being beyond the limitation period. The petitioner's primary contention was that the respondents failed to adhere to a circular requiring the date of the reply to precede the date of the personal hearing, a procedural lapse that occurred in this case. The petitioner argued that this issue was previously decided by the High Court in a similar case.

Held

The Court allowed the present petition, quashing the orders dated 01.04.2024 and 20.01.2025. The Court followed its previous judgment in Writ Tax No.303 of 2024 (Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr.) dated 04.03.2024. The reasoning was based on the petitioner's sole ground that the respondents had failed to adhere to their own circular, which stipulates that the date of the reply must precede the date of the personal hearing. This procedural irregularity was deemed sufficient to set aside the impugned orders. The Court found that the appellate authority's dismissal of the appeal as being beyond limitation was also impacted by the initial procedural flaw. Consequently, the matter was remanded to the assessing authority to pass a fresh order after providing the petitioner with an adequate opportunity of hearing. The ratio decidendi is that non-compliance with a mandatory circular regarding procedural fairness in tax proceedings can lead to the quashing of orders and remand for fresh consideration.

Key Issues

1. Whether the order dated 01.04.2024 and the subsequent appellate order dated 20.01.2025 are liable to be quashed on the ground of procedural irregularity in the conduct of the proceedings under Section 73 of the GST Act, specifically concerning the timing of the reply and the personal hearing? Petitioner's Contention: The petitioner argued that the respondents failed to comply with their own circular, which mandates that the date of the reply must precede the date of the personal hearing. This procedural lapse, they contended, vitiated the proceedings. They relied on the judgment of this Court in Writ Tax No.303 of 2024 (Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr.) dated 04.03.2024, which dealt with a similar issue. Respondent's Contention: The judgment does not record any specific arguments made by the respondent.