Shakil Ahmad Security Agency Vs Deputy Commissioner State GST Ghaziabad and 2 others (Allahabad High Court)
Allahabad High Court has nullified a Goods and Services Tax (GST) demand order issued by the Deputy Commissioner, State GST, Ghaziabad, against Shakil Ahmad Security Agency. The court ruled that even in the absence of a response to a show cause notice, a final GST order must contain detailed reasoning and relevant facts as mandated by Section 75(6) of the GST Act, 2017.
The case, Shakil Ahmad Security Agency Vs Deputy Commissioner State GST Ghaziabad and 2 others, challenged a demand order dated April 27, 2024, issued under Section 73 of the GST Act. The petitioner argued that the impugned order failed to meet the statutory requirements of Section 75(6) of the Act, which stipulates that a “proper officer, in his order shall set out the relevant facts and the basis of his decision.”
The High Court’s decision relied heavily on a prior judicial precedent, M/s Hari Shanker Transport Vs. Commissioner of Commercial Tax U.P. (Writ Tax No.606 of 2025, decided on March 11, 2025). In the Hari Shanker Transport case, the court had observed that an order merely referencing the issuance of notices and a lack of response, followed by a demand, did not constitute a self-contained and reasoned order. The court in that instance had found that the statutory requirements for setting out relevant facts and the basis for the decision were “totally missing.” It was emphasized that even if no response was filed to the notices, it was incumbent upon the authorities to pass an order compliant with Section 75(6) of the Act.
In the present case, the Allahabad High Court found a similar deficiency in the demand order issued to Shakil Ahmad Security Agency. The court noted that the order in question also lacked specific reasons and merely incorporated by reference the indications made in the show cause notice. This, the court concluded, rendered the order unsustainable.
Consequently, the writ petition was allowed. The demand order dated April 27, 2024, was quashed and set aside. The matter has been remanded back to the Deputy Commissioner, State GST, Ghaziabad. The tax authorities are now directed to provide Shakil Ahmad Security Agency with an opportunity to file a response to the show cause notice issued under Section 73 of the Act within four weeks from today. Following the submission of the response and an opportunity for a hearing, a fresh order in accordance with the law is to be passed. This judgment reiterates the judiciary’s stance on the necessity of reasoned orders in tax administration, upholding principles of natural justice.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
