Order u/s  75(6) of GST Act cannot stand merely on reference of SCNs: Allahabad HC [Read Order]

The Allahabad High Court has held that the Goods and Service Tax Act, 2017's Section 75(6) requires that an order be self-contained; merely citing earlier show-cause notifications is insufficient.

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The petitioner, Hari Shanker, claimed that he had received notice under Section 61 (Scrutiny of Returns). The petitioner said he was unaware that the notification had been posted on the portal and was therefore unable to respond. Despite receiving a notification under Section 73 of the Act that included the date and time of the personal hearing as well as the deadline for filing a reply, the petitioner failed to submit a reply. As a result, an order making a liability of Rs. 85,84,759/-under Section 73(9) of the Act was issued.

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The petitioner's application for rectification was similarly denied. The petitioner filed an appeal with the High Court, arguing that the order under Section 73(9) violated Section 75(6) of the GST Act because it lacked justification. One general regulation pertaining to tax determination is included in Section 75 of the GST Act. "The proper officer, in his order, shall set out the relevant facts and the basis of his decision," according to Section 75(6) of the GST Act.

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Chief Justice Arun Bhansali and Justice Kshitij Shailendra's bench ruled that the order dated April 27, 2024, did not comply with Section 75(6) of the Act, which states that "the proper officer, in his order shall set out the relevant facts and the basis of his decision." The order dated April 27, 2024, completely fails to meet the statutory requirements for passing an order by outlining relevant facts and the basis for the decision.

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According to the Court, the authority must issue orders in accordance with Section 75(6) of the GST Act even if the assessee does not respond. This is because a final order must be self-contained, and simply mentioning the earlier notices when issuing the order is insufficient to make it so.

The bench set aside the impugned order  and the Deputy Commissioner, State Tax, Sector-3, Sonbhadra was directed to provide an opportunity of hearing to the petitioner and then decide in accordance with law.

To Read the full text of the Order CLICK HERE

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