Yash Building Material Vs State of U.P. And 2 Others (Allahabad High Court)
Introduction: In a landmark decision, the Allahabad High Court, in the case of Yash Building Material v. State of Uttar Pradesh [Writ Tax No. 1435 of 2022 dated January 31, 2024], declared demand orders without a Show Cause Notice (SCN) as legally baseless. The court’s ruling, dated January 31, 2024, emphasizes the importance of due process in tax matters.
Facts:
Yash Building Material (“the Petitioner”) were served a Notice dated June 4, 2021 under Section 74(5) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) wherein it was stated that the tax was payable by the Petitioner.
As per the law, upon non-payment of the tax, Section 74(7) of the CGST Act states that the proper officer is required to give a notice under Section 74(1) of the Uttar Pradesh Goods and Services Tax Act, 2017 (“the UPGST Act”).
However, the said procedure was not followed. The Assistant Commissioner (“the Respondent”) did not serve the SCN to the Petitioner. Instead, an Order dated July 30, 2021 (“the Impugned Order”) was passed by the Respondent.
The Petitioner appealed against the Impugned Order on the ground that no notice was issued to the Petitioner under Section 74(1) of the UPGST Act. However, an Order dated August 31, 2022 (“the Impugned Order”) was passed by the Additional Commissioner (“the Respondent”).
Hence, aggrieved by the Impugned Orders, the Petitioner has filed the present writ petition.
Issue:
Whether the demand orders can be passed without issuance of the SCN?
Held:
The Hon’ble Allahabad High Court in Writ Tax No. 1435 of 2022 held as under:
