Kalidas Medical Store vs State of Uttar Pradesh

Heard Shri Ajay Kumar Yadav along with Shri Siddharth Yadav, learned counsel for the petitioner, and Shri Ankur Agarwal, learned Standing Counsel for the State. The petitioner has challenged the adjudication order dated 28.12.2023, passed under Section 73(9) of the U.P. G.S.T Act, 2017. Two primary objections have been raised by the petitioner. First, it has been submitted that the adjudicating authority has exceeded the scope of the adjudication notice. Specifically, against the show cause notice proposing to create a demand of GST amounting to Rs.14,45,845.98/-, the impugned order has created a demand of Rs.16,50,391.95/-. This discrepancy is described as a clear violation of Section 75(7) of the Act. Second, it has been argued that the essential requirements of the rules of natural justice have been violated since the petitioner was not given a reasonable opportunity for a personal hearing. The date fixed for the personal hearing was the same as the date fixed for filing the reply. In support of this argument, reliance has been placed on Writ Tax No.303 of 2024, Mahaveer Trading Company Vs. Deputy Commissioner State Tax and Another. The above facts are not in dispute. Therefore, no useful purpose may be served either by keeping the present petition or by calling for a counter affidavit or relegating the petitioner to the forum of appeal. Once the Act requires, by way of a mandatory provision, that the demand arising under an adjudication order may not exceed the demand for which a show cause notice has been issued, there is no room for doubt on this matter. Additionally, the rules of natural justice are far too well established to allow any exception to be made in this regard. Unless the petitioner had been put on notice with respect to the demand proposed to be created by the adjudication order and unless he had been given an adequate opportunity to present his case, the order that may arise could remain procedurally defective. Consequently, it is evident that the impugned order is not sustainable in law, and the petitioner’s grievances warrant judicial intervention to ensure compliance with statutory provisions and principles of natural justice. Accordingly, the writ petition stands disposed of with the following directions: (i) The order dated 28.12.2023 is set aside. (ii) The petitioner may treat the impugned order as the final notice. (iii) The petitioner may submit its further reply thereto within a period of three weeks. In that regard, it may remain open to the petitioner to raise all jurisdictional and merit issues. Subject to such compliance made, the adjudicating authority may fix a date for personal hearing with at least 15 days notice to allow the petitioner to be prepared on all counts. The petitioner undertakes to appear before the adjudicating authority on the dates that may be fixed. Accordingly, an appropriate reasoned order may be passed thereafter. This order ensures that the petitioner’s rights are protected while also providing a clear framework for the adjudicating authority to follow, thus upholding the principles of natural justice and ensuring that the adjudication process is fair and transparent. The directions given aim to rectify the procedural deficiencies identified, thereby promoting compliance with the statutory provisions and safeguarding the petitioner’s right to a fair hearing.

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Kalidas Medical Store

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Allahabad High Court

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GST Case Law