M/S Gopal Ji Art And Crafts vs. State Of Uttar Pradesh And Another

Facts

The petitioner, M/s Gopal Ji Art and Crafts, filed a writ petition challenging an ex-parte demand order and show cause notice dated April 25, 2024, and December 25, 2023, respectively, issued by the Deputy Commissioner, State Tax, Agra, for the period April 2018 to March 2019. The petitioner contended that the show cause notice was faulty because the date fixed for personal hearing (January 8, 2024) was prior to the last date for submitting a reply (January 25, 2024). The petitioner submitted their reply on January 25, 2024, but no further hearing was granted, and an order was passed on April 25, 2024. The petitioner argued that the impugned order wrongly stated that no reply was filed regarding exempted supply, which was contrary to the facts.

Held

The Court held that the impugned order dated April 25, 2024, could not be sustained. The reasoning was that the order appeared to be passed without granting a proper opportunity of hearing to the petitioner and without due application of mind. Specifically, the Court noted the procedural flaw where the date for personal hearing was fixed prior to the due date for submitting a reply. Furthermore, the Court found that the impugned order's assertion that the petitioner made no submission regarding exempted supply was factually incorrect, as the petitioner had indeed submitted a reply. Consequently, the Court quashed and set aside the impugned order. The petitioner was directed to submit a fresh reply to the show cause notice within two weeks, after which a fresh notice for personal hearing would be issued, and an order passed in accordance with the law within twelve weeks. No other issues were expressly left undecided.

Key Issues

1. Whether the ex-parte demand order and show cause notice, issued under Section 73 of the State Goods & Service Tax Act, are vitiated due to a procedural irregularity where the date of personal hearing was fixed prior to the last date for submitting a reply? 2. Whether the impugned order, which stated that the petitioner made no submission regarding exempted supply, was passed without application of mind and without granting a proper opportunity of hearing? The petitioner argued that the show cause notice was inherently flawed because the personal hearing date preceded the deadline for submitting a reply. They further contended that their reply, submitted on January 25, 2024, was not considered, and no subsequent hearing was granted. The petitioner asserted that the impugned order incorrectly claimed no response was given regarding exempted supplies, contradicting the contents of their reply. The respondent, State of Uttar Pradesh, through learned Standing Counsel, did not record any specific arguments in the judgment.