Raksha Enterprises Vs State of U.P. and another (Allahabad High Court)
In the case of Raksha Enterprises vs State of U.P. and Another, the Allahabad High Court addressed the legality of two orders dated 08.08.2024 and 30.05.2024 issued by the Deputy Commissioner, Commercial Tax Department, Auraiya. The orders were challenged under Section 73(9) and Section 161 of the Goods and Services Tax (GST) Act, 2017. The petitioner argued that they were unaware of the initial notice under Section 61 as it was only uploaded on the departmental portal. Subsequent failure to respond led to a notice under Section 73, and eventually, a demand order imposing a liability of Rs. 48,57,213.68. The petitioner contended that the final order violated Section 75(7) of the Act, as it raised a tax demand far exceeding the amount specified in the original notice.
The High Court observed that under Section 75(7) of the GST Act, any tax demand must not exceed the amount specified in the show cause notice, nor be based on grounds not mentioned in the notice. Citing precedents from S R Construction vs State of U.P. and M/s Hari Shanker Transport vs Commissioner of Commercial Tax, U.P., the Court found that the orders in question were defective. In both cases, it was previously held that orders lacking proper reasoning and exceeding the notice amounts contravened the statutory requirements under Section 75(6) and 75(7). Consequently, the High Court quashed the impugned orders and remanded the matter back to the Deputy Commissioner to provide an opportunity for the petitioner to respond and to pass a fresh order in compliance with legal requirements.
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