2025 (3) TMI 1306 - HC - GST

Invocation of extra ordinary jurisdiction of this Court under Article 226 of the Constitution - ex-parte order - neither alleged show cause notice was ever brought to the knowledge of the petitioner nor service of the same was physically ever effected upon petitioner - principles of natural justice - HELD THAT - The division bench in the Ola Fleet Technologies Pvt. Ltd. v. State of U.P. and Others 2024 (7) TMI 1543 - ALLAHABAD HIGH COURT was of the view that party under liability of tax in an ex parte order needs at-least an opportunity to put up his defense by submitting papers which may have led assessing officer to uphold the claim for exemption from tax liability. The division bench accordingly instead of keeping the matter pending disposed off the same with a direction that impugned order may be taken as notice to enable the petitioner to submit his reply and thereafter assessing officer may have to pass a fresh order. Recently in the matter of M/s Akriti Food Industry LLP v. State of U.p. and 3 Others 2025 (1) TMI 772 - ALLAHABAD HIGH COURT the Court has set aside the identical order. It is directed that the order passed by the assessing officer dated 30.12.2023 shall be taken to be notice within the meaning of Section 73 of the GST Act 2017 to enable the petitioner to file his objections and place its documents before assessing officer/ competent authority for its consideration - petition disposed off.

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment include:

Whether the petitioner was denied an opportunity to present a defense due to the alleged non-service of a show cause notice under Section 73 of the Goods and Services Tax Act, 2017.
Whether the rejection of the petitioner's appeal on the grounds of being time-barred, due to lack of knowledge of the original assessment order, rendered the petitioner remediless.

ISSUE-WISE DETAILED ANALYSIS

1. Non-Service of Show Cause Notice

Relevant Legal Framework and Precedents: The legal framework under consideration is Section 73 of the GST Act, 2017, which mandates the issuance of a show cause notice before determining tax liability. The Court referenced previous judgments, including Ola Fleet Technologies Pvt. Ltd. v. State of U.P. and Others, which dealt with similar issues regarding non-service of notices.
Court's Interpretation and Reasoning: The Court emphasized the principle that no party should be condemned unheard, aligning with the legislative intent behind the requirement of serving a notice. The Court found that the petitioner was not given a fair chance to present its case due to the alleged non-availability of the notice on the GST portal.
Key Evidence and Findings: The petitioner argued that the notice was not visible under the "view notices and orders" tab on the GST portal, which was crucial for the petitioner to respond adequately. The Court accepted this contention based on similar precedents.
Application of Law to Facts: The Court applied the principle of natural justice, asserting that the petitioner should have been given an opportunity to submit relevant documents and defenses before an order was passed.
Treatment of Competing Arguments: The Court acknowledged the petitioner's argument regarding the non-service of the notice and found it persuasive, particularly in light of the precedents cited.
Conclusions: The Court concluded that the order passed by the assessing officer should be treated as a notice, allowing the petitioner to file objections and present documents.

2. Rejection of Appeal on Grounds of Delay

Relevant Legal Framework and Precedents: The issue of delay in filing an appeal was considered in the context of the petitioner's claim of lack of knowledge about the assessment order. The Court referred to its own precedents, such as Shyam Roshan Transport v. State of U.P., which addressed similar procedural concerns.
Court's Interpretation and Reasoning: The Court found that the petitioner's appeal was rejected due to being time-barred, which was a consequence of the petitioner not being aware of the assessment order. The Court reasoned that procedural fairness required the petitioner to be informed adequately to exercise the right of appeal.
Key Evidence and Findings: The petitioner claimed that the assessment order was not communicated via email and was only discovered upon checking the GST portal. The Court found this claim credible, given the procedural lapses highlighted.
Application of Law to Facts: The Court applied principles of fairness and procedural justice, determining that the petitioner should not be penalized for a delay caused by lack of proper notice.
Treatment of Competing Arguments: The Court considered the petitioner's argument regarding the lack of notice and found it compelling, leading to the conclusion that the appeal should not have been dismissed on grounds of delay.
Conclusions: The Court directed that the petitioner be allowed to submit objections and documents, effectively granting a fresh opportunity to contest the tax liability.

SIGNIFICANT HOLDINGS

Verbatim Quotes of Crucial Legal Reasoning: The Court stated, "nobody should be condemned unheard," emphasizing the importance of serving notice as per legislative intent.
Core Principles Established: The judgment reinforced the principle of natural justice, mandating that parties must be given a fair opportunity to present their case before any adverse order is passed.
Final Determinations on Each Issue: The Court determined that the original assessment order should be treated as a notice, allowing the petitioner to file objections. It directed the assessing officer to consider these objections and documents within a specified timeframe, ensuring the petitioner receives a fair hearing.