The Allahabad High Court directed the petitioner to deposit 50% of the disputed tax of Rs. 73.8 lakhs for providing fresh hearing and issuance of fresh order. The bench noted that the plea of the petitioner was not considered by the Goods and Services Tax ( GST ) department to some extent while issuing the SCN under Section 74(1) of GST Act, 2017.
The petitioner had earlier received a notice under Section 74(5) on April 1, 2023, to which a reply was duly submitted. However, the SCN issued on May 30, 2023, allegedly ignored several aspects of the petitioner’s response and granted time until June 30, 2023, for further reply.
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Due to unforeseen family disputes, the petitioner claimed to have missed the hearing, which resulted in an ex-parte order dated July 24, 2023, raising a tax demand of ₹73,87,225.92.
The petitioner argued that critical parts of their reply to the initial notice (Form GST DRC-01A) were neither reproduced nor considered in the SCN or the final order. Furthermore, having missed the statutory limitation period for appeal under Section 107 of the Act, the petitioner sought judicial intervention to avoid suffering irreparable harm.
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The counsel of the department countered that the petitioner’s personal circumstances were insufficient grounds for rehearing and emphasized that the orders were issued after due consideration by the Assessing Authority.
The Court found that while the petitioner’s reply had been partially considered, important portions of the plea were ignored during the issuance of the SCN under Section 74(1).
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Considering these procedural lapses and the unique circumstances of the case, Justices Vikas Budhwar and Arun Bhansali directed the petitioner to deposit 50% of the disputed amount, after accounting for any prior payments, within four weeks.
If the deposit is made within the directed time, the impugned order dated July 24, 2023, will be set aside, and the respondent will provide the petitioner with an opportunity for a fresh hearing and issue a revised order. Failure to comply with the deposit requirement would result in the dismissal of the writ petition.
Adv. Anurag Mishra and Adv. Pragya Pandey appeared for the petitioner and – C.S.C., Ankur Agarwal (S.C.) appeared for the department.
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