2024 (4) TMI 1060 - HC - GST

Validity of Service of notice u/s 74(5) instead of u/s 74(1) of CGST / UPGST Act, 2017 - Non-payment of Tax / GST - violation of principles of natural justice - HELD THAT - From the record, it is clear that a notice was issued to the petitioner under Section 74(5) of the Act on June 4, 2021 wherein officer asserted that the tax is payable by the assessee. However, upon non-payment of the tax, Section 74(7) of the Act would come into play and the proper officer is required to give a notice under Section 74(1) of the Act. This procedure, that is to be followed, was not followed and no show cause notice was issued to the petitioner. Instead of the same, the impugned order dated July 7, 2021 was passed. Thus, it is clear that proper show cause notice was not issued to the petitioner, and therefore, all the orders impugned herein are without any basis of law. In my opinion, the impugned orders are required to be set aside. Petition allowed.

Summary

Issues involved:
The issue involves a writ petition challenging orders passed under Section 74(1) of the Uttar Pradesh Goods and Services Tax Act, 2017 for lack of proper notice to the petitioner.

Judgment Summary:

Issue 1: Lack of proper notice under Section 74(1) of the Act
The petitioner challenged orders dated July 7, 2021, and August 31, 2022, issued by the Assistant Commissioner and Additional Commissioner, respectively, for failure to issue a notice under Section 74(1) of the Act. A notice was issued under Section 74(5) asserting tax liability without following the procedure of issuing a show cause notice under Section 74(1). The court found that the proper show cause notice was not issued to the petitioner, rendering the impugned orders baseless. Consequently, the court quashed and set aside the orders dated July 7, 2021, and August 31, 2022. The respondents were directed to proceed after issuing a fresh notice under Section 74(1) of the Act. The writ petition was allowed with these observations.