Star Food and Beverages Vs State of Punjab and another (Punjab and Haryana High Court)
Summary: The Punjab and Haryana High Court allowed the writ petition filed by Star Food and Beverages challenging an adjudication order dated 24 April 2024 under Section 74 of the Punjab Goods and Services Tax Act, 2017, relating to the tax period April 2018 to March 2019. The department issued a show cause notice dated 25 September 2023, to which the petitioner submitted a detailed reply on 25 October 2023. Supporting evidence was also produced during the personal hearing. However, the adjudicating authority failed to consider either the written response to the SCN or the evidence submitted by the petitioner.
The High Court observed that the adjudication order was virtually a copy of the show cause notice and merely concluded that the petitioner’s explanation was unsatisfactory. The Court found that the order had been passed without independent application of mind. The ruling concerns the requirement that adjudicating authorities examine taxpayer submissions rather than mechanically reproduce allegations from an SCN. Comparable judicial discussions have emphasised the importance of considering the taxpayer’s reply and issuing a reasoned adjudication order.
Accordingly, the High Court set aside the impugned order dated 24 April 2024 (Annexure P-7), while expressly granting the respondents liberty to proceed afresh in accordance with law. The petition was allowed. The Court did not determine the underlying GST liability on its merits.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
A show cause notice dated 25.09.2023 under Section A show cause notice dated 25.09.2023 under Section A show cause notice dated 25.09.2023 under Section 74 of the 74 of the 74 of the Punjab Goods and Services Tax act, 2017, pertainingPunjab Goods and Services Tax act, 2017, pertainingPunjab Goods and Services Tax act, 2017, pertaining to the tax period April to the tax period April to the tax period April 2018 to March 2019 was issued to the petitioner, to2018 to March 2019 was issued to the petitioner, to2018 to March 2019 was issued to the petitioner, to which the petitioner which the petitioner which the petitioner filed a detailed responsefiled a detailed response dated 25.10.2023. Thereafter, during Thereafter, during the personal hearing granted granted to the petitioner, evidence in support of, evidence in support of the petitioner’s detailed responsedetailed response dated 25.10.2023 was also produced but dated 25.10.2023 was also produced but a perusal of the impugned adjudication order dated 24.04.2024 revealimpugned adjudication order dated 24.04.2024 revealimpugned adjudication order dated 24.04.2024 reveals that neither s that neither s that neither the justification offered by the petitioner through itsjustification offered by the petitioner through itsjustification offered by the petitioner through its written r written r written response dated 25.10.2023 nor the25.10.2023 nor the evidence produced by it during the course of personevidence produced by it during the course of personal al hearing have been considered by the respondents as hearing have been considered by the respondents as hearing have been considered by the respondents as the impugned the impugned the impugned adjudication order isadjudication order is found to be a virtual copy of the show cause notice and ual copy of the show cause notice and in the end whereof, it is simply stated that the pein the end whereof, it is simply stated that the pein the end whereof, it is simply stated that the petitioner’s written response titioner’s written response titioner’s written response was not found to be satisfactory. found to be satisfactory.
2. In the light of the above, the impugned adIn the light of the above, the impugned adIn the light of the above, the impugned adjudication order is found to have been passed have been passed without any application of mind. Therefore, the any application of mind. Therefore, the impugned adjudication order dated 24.04.2024 (Anneximpugned adjudication order dated 24.04.2024 (Anneximpugned adjudication order dated 24.04.2024 (Annexure Pure Pure P-7) is set aside. However, the respondents are grantedHowever, the respondents are granted liberty to proceedliberty to proceed afresh against the petitioner, in accordance with law. petitioner, in accordance with law.
3. The petition is allowed iThe petition is allowed in the above terms. n the above terms.
