Case Law Details
Anand Swaroop Rastogi Vs State of U.P. And 2 Others (Allahabad High Court)
In the case of Anand Swaroop Rastogi Vs State of U.P., the Allahabad High Court addressed the validity of GST demand orders issued solely based on findings from the Income Tax Department without independent verification. The petitioner, engaged in jewelry trading and holding GSTIN No. 09AABHA6768A1ZI, had closed his business in September 2017 and established a new partnership firm with a different PAN. Despite this, GST proceedings were initiated based on a survey conducted by the Income Tax Department, which found discrepancies unrelated to the petitioner’s current business activities. The petitioner’s objections, including evidence of the business closure and differing PANs, were not considered. The Court found that the GST demand orders were flawed as they relied exclusively on Income Tax findings without an independent assessment by GST authorities. Consequently, the Court quashed the orders and remanded the case for a fresh examination by the proper officer. The new proceedings must be conducted with a reasoned and speaking order within three months of receiving the Court’s certified copy. Any payments made under the invalid orders will be subject to the outcome of the new proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Rishi Raj Kapoor, learned counsel for the petitioner and Sri Ravi Shanker Pandey, learned Additional Chief Standing Counsel for the State-respondents.
2. By means of instant writ petition, the petitioner has assailed the order dated 06.03.2021 passed by respondent no.2 and order dated 27.12.2019 passed by respondent no.3, respectively.
3. Learned counsel for the petitioner submits that the petitioner was registered under the U.P.G.S.T. Act, having GSTIN No. 09AABHA6768A1ZI and engaged in the business of trading of jewellary and bullion, the said GST number was granted on PAN of Anand Swaroop Rastogi, HUF. Thereafter, the petitioner’s business was closed with effect from 30.09.2017. Thereafter, another partnership firm was created having independent PAN. Thereafter, on the said business premises, a survey was conducted by the Income Tax Department and on the basis of allegation at the time of survey, present proceedings under Section 73 of the U.P.G.S.T. Act have wrongly been initiated against the petitioner. Thereafter, a show cause notice was issued to the petitioner to which the petitioner submitted a specific reply, bringing on record the material that the Pan for which the proceedings were initiated are different and the petitioner had closed his business for the said Pan, but without considering the same, the impugned order has been passed.
4. He further submits that the specific objection was raised before the authority and the ground was taken, but without considering the same, the impugned order has been passed, which is totally wrong and illegal.
5. Per contra, learned Additional Chief Standing Counsel supports the impugned orders and submits that the proceedings have rightly been initiated.
6. After hearing the parties, the Court has perused the record.
7. It is not in dispute that the petitioner had closed his business with effect from 30.09.2017. Further, no material has been brought on record to suggest that the Pan of (HUF), which was used by the proprietor for registration, was also used for the partnership firm to which the Income Tax Department conducted a survey in which excess stock was found, this fact was brought to the notice of the authority concerned, but without any independent finding, only on the finding recorded by the Income Tax Department, the impugned order has been passed.
8. In absence of any independent finding by the proper officer as well as confirmed by the appellate authority, the impugned orders have been passed, which cannot be sustained in the eyes of law and the same are hereby quashed.
9. Accordingly, the writ petition is allowed. The matter is remanded to the proper officer for initiating de novo proceedings by reasoned and speaking order, after hearing all the stakeholders, within a period of three months from the date of production of certified copy of this order.
10. Any amount deposited by the petitioner pursuant to the impugned orders, shall be subject to the outcome of the order to be passed afresh by the proper officer.
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