M/S Abhai Enterprises Lko. Thru. Proprietor Ashish Kumar Agarwal And Another vs. State Of U.P. Thru. Addl. Chief Secy. Tax And Registration Lko. And 2 Others

Facts

The petitioner, M/s Abhai Enterprises Lko., through its proprietor Ashish Kumar Agarwal, filed a writ petition challenging two orders. The first order, dated December 28, 2023, was passed under Section 73 of the GST Act. The second order, dated November 26, 2024, dismissed the petitioner's appeal as being beyond the limitation period. The petitioner's primary contention was that the show-cause notice issued in the GST proceedings fixed the same date for filing a reply and for the hearing. This procedural defect formed the sole basis for the challenge.

Held

The Court allowed the present petition, quashing both the order dated December 28, 2023, passed under Section 73 of the GST Act, and the order dated November 26, 2024, which dismissed the appeal as time-barred. The Court's decision was based on the sole ground raised by the petitioner, which was that the show-cause notice fixed the same date for filing the reply and for the hearing. Following its own previous judgment in Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr., the Court found this procedural irregularity to be fatal. The Court reasoned that such a notice does not provide an adequate opportunity for the assessee to respond, thus violating principles of natural justice. Consequently, the matter was remanded to the assessing authority with a direction to pass a fresh order after affording the petitioner a proper opportunity of hearing. No issue was expressly left undecided.

Key Issues

1. Whether the order passed under Section 73 of the GST Act is vitiated due to the show-cause notice fixing the same date for filing of reply and for hearing, thereby violating the principles of natural justice? (Question of law) Petitioner's Argument: The petitioner argued that the show-cause notice was flawed because it mandated the filing of a reply and the hearing to occur on the same date. This, according to the petitioner, denied them a reasonable opportunity to prepare and present their defense. 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.) decided on March 4, 2024, which dealt with a similar issue. Respondent's Argument: The judgment records no specific argument from the respondent (State of U.P. Thru. Addl. Chief Secy. Tax And Registration Lko. And 2 Others).