Shashi Contractors Vs State of U.P. and another (Allahabad High Court)
An order passed after due application of mind and consideration to material available on record is valid where the taxpayers fails to respond to Show cause notice and reminders thereof- Allahabad High Court
In the case of Shashi Contractors vs. State of U.P. and another, the Allahabad High Court addressed the validity of a tax order passed under Section 73(9) of the Goods and Services Tax Act, 2017. The matter arose when the petitioner failed to respond to a series of notices, beginning with one under Section 61, followed by a show cause notice under Section 73, and two subsequent reminders. These notices highlighted discrepancies in the petitioner’s GST returns for the tax period of April 2018 to March 2019. Due to the petitioner’s non-compliance, the Department proceeded to pass an order imposing a tax liability of Rs. 3,20,852.68, which included tax, interest, and penalty.
The petitioner challenged the order on the grounds that it lacked detailed reasoning and that the penalty was not properly notified as required by Section 75(6) and 75(7) of the Act. However, the High Court found these arguments unconvincing. The court noted that the show cause notice explicitly pointed out the discrepancies and called upon the petitioner to provide an explanation. It also included a breakdown of the tax, interest, and potential penalty as per the CGST Act, thereby fulfilling the statutory requirement of notifying the concerned party. Since the petitioner did not respond despite multiple opportunities, the Department was not obligated to consider hypothetical defenses or probable grounds that could have been raised.
