2025 (4) TMI 493 - HC - GST

Imposition of punishment and then conducting the trial - taking deter rent and coercive action even prior to issuance of pre-intimation notice - HELD THAT - The conduct of the Department is deplorable. The aim and objective of the GST Act is not to destroy businesses or ensure their closures. The GST regime was brought in with the objective of ensuring tax compliances and not with the intent or objective of ensuring loss of livelihoods. The growth of businesses and sustenance of businesses is vital for employment generation and growth of the Nation. If the Department can bear this in mind and act in consonance with the stated objectives of the Act it would be rendering yeomen service to the business community. Such actions reflect a mind set which is not wished to name here. There shall be an interim order as prayed for and any act ion shall be duly in compliance with the provisions of the GST Act - List on 29.04.2025.

Summary

In the case before the Uttarakhand High Court, the bench comprising Hon'ble G. Narendar, C.J., and Hon'ble Alok Mahra, J., addressed the actions of a Department under the GST Act. The court criticized the Department's actions as "startling and shocking," questioning the legal basis for taking "deterrent and coercive action" before issuing a pre-intimation notice. The court likened the Department's conduct to "imposition of punishment and then conducting the trial," which it deemed deplorable. The judgment emphasized that the GST Act's objective is to ensure tax compliance without destroying businesses or livelihoods. The court advised the Department to align its actions with the Act's objectives, highlighting the importance of business growth for employment and national development. Consequently, the court issued an interim order mandating compliance with the GST Act's provisions and scheduled the next hearing for April 29, 2025, allowing time for a counter-affidavit.