Glance Care Private Limited Vs Union of India and 4 others (Allahabad High Court)
Allahabad HC quashes two Section 154 tax orders, citing laconic reasoning and violation of natural justice. Fresh hearing ordered.
The Allahabad High Court quashed two orders passed under Section 154 of the Income Tax Act, 1961, against Glance Care Private Limited. The court’s decision centered on procedural improprieties and a violation of the principles of natural justice. Glance Care had initially filed a writ petition challenging a notice under Section 148, an order under Section 148A(d), and an order under Section 154. During the initial hearing, the High Court, noting a pending Section 154 application, directed the respondent to decide the application within four weeks.
Following this directive, an order dated December 30, 2024, was passed under Section 154. Glance Care, aggrieved by this order, filed the present writ petition, arguing that the order was “laconic” and did not address the points raised in their application. The High Court, upon reviewing the December 30th order, agreed with the petitioner’s contention.
Subsequently, the respondent produced a new order dated February 6, 2025, also under Section 154. This order, the respondent claimed, was passed in response to the High Court’s observations on January 22, 2025, and therefore, no further hearing was necessary. The High Court strongly criticized this procedure. It emphasized that a fresh order could not be passed without formally recalling the previous order. Furthermore, the court clarified that its previous order had merely noted the petitioner’s contentions regarding the December 30th order and had not directed the passing of a fresh order. The court also pointed out that the filing of the writ petition did not obviate the need to provide the assessee with an opportunity to be heard before passing a fresh order.
The Allahabad High Court quashed both the December 30, 2024, and the February 6, 2025, orders. It directed Glance Care to appear before the concerned authority on a specified date, February 19, 2025, and mandated the authority to provide the petitioner with a hearing before passing a fresh order under Section 154. The court clarified that its decision to quash the previous orders should not influence the authority’s fresh decision, which should be made fairly and in accordance with the law. The writ petition was disposed of with these directions.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
