GST Appeal on Registration Cancellation Rejected without Reasons: Allahabad HC sets aside Order, says Quasi-Judicial Orders Must Be Reasoned [Read Order]

The division bench of Justices Shekhar B. Saraf and Praveen Kumar Giri was hearing a writ petition filed by M/s Nikhil Construction, challenging the respondent authorities’ remittance of GST at 5% instead of 12%, despite the petitioner raising the invoice at the revised rate.

The petitioner, engaged in works contract services, completed the assigned work on June 27, 2022, at which point the applicable GST rate was 5%. However, as per the Notification dated June 29, 2022, the GST rate on such services was revised to 12%, effective from July 18, 2022.

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Subsequently, the petitioner raised an invoice on March 10, 2025, clearly charging GST at the revised 12% rate. Despite this, the State respondents made payment inclusive of only 5% GST, thereby short-paying the balance 7%.

The petitioner’s counsel contended that under Section 14(a)(i) of the U.P. GST Act, 2017, the applicable rate of tax should be determined based on the earlier of either the date of invoice or the date of receipt of payment. Since the invoice was raised prior to the date of payment, the applicable rate should be the rate prevalent on the invoice date i.e., 12%.

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After reviewing the facts and the statutory provision, the Bench noted that the petitioner's argument seemed to have some merit.

The Court instructed the respondents to provide specific justification for why the higher GST rate shown on the invoice should not be applicable, particularly given that payment was received immediately after the invoice was issued.

The hearing on the subject has been scheduled on July 25, 2025.

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