The Allahabad High Court has held that inherent defects in the decision making process cannot be cured by the GST department at a later stage.
The bench of Justice Ajit Kumar has observed that as and when mandatory requirement of law is not taken care of in the matter of compliance of procedure before taking decision by assessing authority or any competent authority for that matter, then it becomes an inherent defect in the decision making process which cannot be cured at a later stage.
The petitioner/assessee, a Limited Liability Partnership concern engaged in the business of manufacturing and sale of goods claimed to be exempted from liability of tax/duty under the Goods and Services Tax Act, 2017 and hence seeks to challenge the order dated 7.11.2024 passed in appeal by Additional Commissioner Grade II, first appellate authority.
The petitioner submitted that order of assessing officer fastening the petitioner concerned with a liability of tax upon the sale for the relevant financial year in question alongwith interest and penalty in purported exercise of power under Section 73 of the GST Act, is absolutely ex parte one as neither alleged show cause notice was ever brought to the knowledge of the petitioner, nor service of the same was physically ever affected upon petitioner.
The petitioner got to know about the proceedings conducted back when the order came to be uploaded on the dashboard with the tab “view additional notices and orders”. Thus, it is argued that petitioner having failed to notice the notice GST DRC- 01A, it could not make any reply at all.
Thus, the petitioner made two fold submissions.
Firstly, in the absence of service of notice/ the show cause notice, petitioner was denied opportunity to put up its defence so as to justify no liability of tax qua business of manufacturing and sale under the GST; and
Secondly, remedy of appeal having been denied on the ground of delay that was for want of knowledge, petitioner has been rendered remediless.
The court directed that the order passed by the assessing officer 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 his documents before assessing officer/competent authority for its consideration.
The petitioner shall be submitting his reply alongwith document within a period of eight weeks from today and thereafter assessing officer/competent authority shall be giving due consideration to the objections and documents filed and opportunity of hearing as well and thus shall be taking decision afresh within a further period of four weeks.
The court directed that the order passed by the assessing officer 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 his documents before assessing officer/competent authority for its consideration.
Read More: Income Tax Weekly Flashback: 5 to 11 January 2025
Case Details
Case Title: M/S Akriti Food Industry LLP Versus State Of UP
Case No.: Writ Tax No. – 2070 Of 2024
Date: 3.12.2024
Counsel For Petitioner: Rahul Agarwal
Counsel For Respondent: C.S.C.
