The High Court of Allahabad held that the GST appeal authority does not have powers to remand proceedings and quashed the order passed under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017 as the same was passed by grossly violating the principles of natural justice.
The petitioner, Ms. Sri Ganesh Sales, has challenged the order passed by the department under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017 for the financial year ( 2020-21 ).
The bench observed that the facts of this case are quite similar to those of Mahaveer Trading Company vs. Deputy Commissioner State Tax and another [(Writ Tax No.303 of 2024)], for which the judgment was delivered by the HC’s coordinate bench
It was observed by the coordinate bench in the case, as mentioned earlier, that in the order passed by the Commissioner, no date and time was mentioned for the personal hearing.
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The bench observed that the date of reply to the Show Cause Notice has to be prior to the date of the personal hearing.
The Coordinate bench observed that before any adverse order is being passed, the notice must be offered with a personal hearing and that it cannot be avoided at any cost unless noticee waives such a right or fails to avail the same.
The Allahabad HC, relying on the judgment passed by the coordinate bench, observed that the impugned order would not sustain as it was passed by grossly violating the principles of natural justice.
The coordinate bench also observed that “the self-imposed bar of alternative remedy cannot be applied in such facts. If applied, it would be of no real use. In fact, it would be counter productive to the interest of justice. Here, it may be noted, the appeal authority does not have the authority to remand the proceedings.”
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The High Court, composed of Justice Vipin Chandra Dixit and Justice Shekhar B. Sraf, set aside the impugned order emphasizing the importance of following the principle of natural justice.
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