Origin B.R. Digitalsigns Private Ltd Vs State Of U.P (Allahabad High Court)
The Allahabad High Court addressed a petition filed by Origin B.R. Digitalsigns Private Ltd. challenging an assessment order and a subsequent appellate order under the Uttar Pradesh Goods and Service Tax Act, 2017. The dispute pertained to the financial year 2018-19, where a survey of the petitioner’s premises led to the seizure of documents indicating a total business transaction of ₹535.33 lakhs across two bank accounts. However, the petitioner’s GSTR Form 3B for the same period disclosed a business of only ₹207.988 lakhs, leading the assessing authority to conclude an intention to evade tax on the undisclosed amount of ₹327.35 lakhs, and consequently imposing tax and penalty. The petitioner’s appeal against this order was also rejected as they did not appear before the appellate authority.
The primary contention of the petitioner before the High Court was that the entire assessment was based on a State Intelligence Bureau (SIB) report, a copy of which was never provided to them by either the assessing or the appellate authority. The petitioner argued that this non-disclosure severely prejudiced their ability to defend against the charges and effectively rendered them remediless. The High Court, after seeking clarification from the Standing Counsel, confirmed that the SIB report was indeed never given to the petitioner. Relying on the principles of natural justice, the court held that when charges are based on specific material like the SIB report, it is mandatory for the concerned party to be provided with all such material to enable a proper response. The failure to provide the SIB report was deemed a gross violation of natural justice, making the assessment and appellate orders arbitrary and illegal.
Consequently, the Allahabad High Court set aside both the assessment and the appellate orders. The matter was remitted back to the assessing authority with a direction to provide the petitioner with a copy of the SIB report and any other material forming the basis of the demands. The court stipulated a timeline for this process, allowing the petitioner two weeks to receive the documents and a further two weeks to respond to the allegations. Following the petitioner’s response, the assessing authority was directed to finalize the matter within six weeks, in accordance with the law and after providing a full opportunity for a hearing to the petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
