M.P Commodities PVT. LTD. vs. State Of Gujarat

Facts

M.P. Commodities Pvt. Ltd. (the petitioner) filed a writ application before the Gujarat High Court challenging two orders in Form GST-DRC-07 dated December 18, 2021, and December 27, 2021, passed by the Assistant Commissioner of State Tax, Division-3, Gandhinagar (the respondent). The petitioner also sought to quash two show cause notices dated October 21, 2019, in Form GST DRC-01. The petitioner argued that the show cause notices lacked clear reasons and the subsequent orders were non-speaking. The respondent, represented by the learned Additional Government Pleader, initially requested short notice and later conceded that the impugned orders could be termed non-speaking, although attempts were made to argue that relevant aspects were considered but not reflected in the orders.

Held

The Court held that both impugned orders in Form GST-DRC-07 dated December 18, 2021, and December 27, 2021, passed by the Assistant Commissioner of State Tax, Division-3, Gandhinagar, were non-speaking orders. The Court accepted the fair submission of the learned AGP that although the respondent's counsel attempted to argue that relevant aspects were considered, this was not reflected in the impugned orders. Consequently, the Court quashed and set aside these orders. The matter was remitted to the Assistant Commissioner of State Tax, Division-3, Gandhinagar, for a fresh hearing. The Assistant Commissioner was directed to ensure that a reasoned order is passed, dealing with each and every submission made by the writ applicants, including their oral and written submissions, and also permitting them to question the legality and validity of the show cause notices. This entire exercise was to be completed within a period of three months from the date of the order. The interim relief granted earlier stood vacated.

Key Issues

1. Whether the orders in Form GST-DRC-07 dated December 18, 2021, and December 27, 2021, passed by the Assistant Commissioner of State Tax are non-speaking orders, thereby violating principles of natural justice and statutory requirements? (Question of law) 2. Whether the show cause notices dated October 21, 2019, in Form GST DRC-01 were issued with clear and explicit reasons, as required by law? (Question of mixed law and fact) Petitioner's contentions: The petitioner argued that the impugned orders were non-speaking and failed to consider their submissions and documentary evidence. They also contended that the show cause notices lacked clarity and proper grounds, necessitating their quashing and re-issuance in accordance with law. The petitioner sought a writ of certiorari to quash the orders and a writ of mandamus to direct the respondent to decide the matter after verifying evidence and passing a reasoned order. They also sought a stay on the recovery proceedings. Revenue's contentions: The learned AGP for the respondent fairly submitted that the impugned assessment orders could be termed as non-speaking orders. While attempting to point out from the record that relevant aspects were considered, the AGP conceded that this was not reflected in the impugned orders.