M/S Unique And Divine Eternity vs. State Of Uttar Pradesh And 2 Others

Held

The Court held that the introduction of additional documents/inputs by the department at the appellate stage, which were not part of the original proceedings, and the subsequent passing of an order without affording the petitioner an opportunity to be heard on their objections to these new inputs, constituted a violation of the principles of natural justice. The Court noted that while the department introduced additional inputs on July 14, 2026, and the petitioner objected on July 17, 2026, the appellate order was passed on July 20, 2026, without addressing the objections or providing a hearing. The Court referred to the judgment in Mahaveer Trading Company (supra) stating that it would be a travesty of justice if an opportunity is not accorded when objections are raised to new documents. The Court also acknowledged the opinion of Coordinate Benches in Anandeshwar Traders (supra) and Khan Enterprises (supra) that additional documents cannot be introduced by the department at the appellate stage, as this right is available only to the assessee. Consequently, the appellate order dated July 20, 2026, was set aside. The matter was remitted back to the appellate authority for a fresh decision within two months.

Facts

The petitioner, M/s Unique And Divine Eternity, a proprietorship firm, received a show cause notice on April 27, 2026, for cancellation of its GST registration, with a hearing scheduled for May 7, 2026. The registration was suspended on the hearing date. The petitioner argued the show cause notice lacked necessary ingredients. An order for cancellation was passed on June 1, 2026. The petitioner appealed this order, raising several grounds. During the appeal, the department introduced additional inputs dated July 14, 2026, which were not part of the original show cause notice or cancellation order. The petitioner objected to these inputs on July 17, 2026. However, the appellate authority passed an order on July 20, 2026, without granting the petitioner an opportunity to be heard on its objections.

Key Issues

1. Whether the appellate authority erred in introducing additional documents/inputs by the department at the appellate stage, contrary to Rule 112 of the Uttar Pradesh Goods and Service Tax Rules, 2017, and the principles laid down in Anandeshwar Traders (supra) and Khan Enterprises (supra)? 2. Whether the appellate order dated July 20, 2026, is vitiated due to a violation of the principles of natural justice, as the petitioner was not afforded an opportunity of hearing after filing objections to the additional inputs submitted by the department? Petitioner's Arguments: The petitioner argued that under Rule 112 of the UP GST Rules, 2017, only the assessee can produce additional evidence, not the department. They contended that the department's introduction of additional inputs at the appeal stage was impermissible, citing judgments from Coordinate Benches. Furthermore, the petitioner argued that despite filing objections to these additional inputs on July 17, 2026, the appellate authority passed the impugned order on July 20, 2026, without providing an opportunity to be heard, thus violating principles of natural justice. Revenue's Arguments: The revenue contended that the show cause notice was issued for violations and since no reply was filed, the registration was cancelled. They argued that the department introduced certain inputs on July 14, 2026, to ensure the appeal was decided on a correct perspective, and a copy was served on the petitioner. The revenue asserted that there was no violation of the principles of natural justice.