Allahabad HC Mandates Detailed GST Order Despite Non-Response to Show Cause Notice

Under Goods and Services Tax (GST), the proper officer should cite the pertinent facts and the basis for the decision in their final order, even when the taxpayer is unable to answer to the Show cause notice, the Allahabad High Court ruled.

A writ petition has been furnished by M/s Shakil Ahmad Security Agency before the HC. On 27.04.2024, the applicant contested the demand order issued under section 73 of the GST Act, 2017.

The applicant argued that the order does not have any reason and is not by section 75(6) of the Act, which obligates that a final order is to specify the pertinent facts and justification for the demand.

Also Read: Uploading of SCN by the GST Dept Under the Additional Notices Tab on the Portal is Improper

The court agreed with the applicant, relying on its previous decision in M/s Hari Shanker Transport v. Commissioner of Commercial Tax, U.P., where it ruled that only supporting the easier issued notices without discussing their content, the taxpayer’s conduct, or factual reasoning does not fulfill the statutory need of a self-contained speaking order.

In the existing case, the impugned order only referred to the issuance of the notices without any independent causes or factual findings. It was said by the court that even in the cases where the taxpayers are unable to answer to the SCNs, the proper officer is obligated by the law to furnish a reasoned order under section 75(6).

The demand order on 27.04.2024 has been quashed by the Chief Justice Arun Bhansali and Justice Kshitij Shailendra, asking the department to grant the applicant a chance to submit a reply before the SCN within 4 weeks. The court directed the GST officer to pass a fresh reasoned order just after furnishing the applicant a hearing opportunity.