DILIP KUMAR GUPTA V. ADDITIONAL COMMISSIONER GRADE-2 (APPEAL) AND ANOTHER

WTAX/1093/2023

AI Insights

The case involves Dilip Kumar Gupta, a businessman engaged in jewellery and money lending, who challenged an order passed by the Additional Commissioner Grade-2 (Appeal) under the UPGST Act, 2017. The order dismissed Gupta's appeal regarding a penalty for undeclared stock found during an income tax survey. The petitioner argued that the order was passed without proper notice or reason, violating principles of natural justice and Section 107(12) of the CGST Act, which mandates a reasoned order. The state defended the order, claiming the petitioner had avoided hearings. The court found that the order was passed without proper notice and lacked adequate reasoning, leading to its quashing and remand for a new hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 689881 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 05-05-2025
• Assessment Year: misc
• Other Referred Cases: M/S Videocon D2H LTD. Her Versus State of U.P. and 3 Others, 2016 U.P.T.C.- 237, Assistant Commissioner, Commercial Tax Department, Works Contract & Leasing, Kota Versus M/s Shukla & Brothers, 2010 0 AIR(SCW) 3277
• Laws Referred To: UPGST Act, 2017, CGST Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: C S C; RAVI SHANKER PANDEY
• Assessee Lawyers: SUYASH AGARWAL
• Keywords: Ex parte order; GST; Natural Justice; Reasoned order
• Section: 73; 107(12)

Judgement Text

"Neutral Citation No. - 2025:AHC:71562 Court No. - 10 Case :- WRIT TAX No. - 1093 of 2023 Petitioner :- Dilip Kumar Gupta Respondent :- Additional Commissioner Grade-2 (Appeal) And Another Counsel for Petitioner :- Suyash Agarwal Counsel for Respondent :- C.S.C. Hon'ble Piyush Agrawal,J. 1. Heard Sri Suyash Agarwal, learned counsel for the petitioner and Sri Ravi Shanker Pandey, learned ACSC for the State- respondents. 2. The present petition has been filed challenging the order dated 20.01.2022 passed by the respondent no.1- Additional Commissioner Grade-2 (Appeal) Judicial Area-3, Commercial Tax, Prayagraj in Appeal No.AD090221011476G. 3. Counsel for the petitioner submits that the petitioner is engaged in the business of jewellery and money lending in the name and style of M/s Jai Mata Di Jwellers Chowk Bazar, Fatehpur. When the business premises of the petitioner was surveyed by the income tax department excess stock was found, which was not declared in his return of income. On the basis of the said survey, the proceedings under GST Act were initiated and an order dated 27.12.2019 was passed by the respondent no.2 under Section 73 of UPGST Act, 2017, against which, the petitioner has preferred an appeal, in which, several dates were fixed and the last date was fixed for 18.01.2022, but instead of passing order on the said date, the impugned order was passed on 20.01.2022 dismissing the appeal. 4. He submits that while passing the impugned order observations have come that the petitioner has lost interest and, thereafter, passed an order on the next date, but not on the date fixed, to which, no notice whatsoever given to the petitioner, therefore, the impugned order is bad in the eyes of law. He further submits that as per Section 107 (12) of CGST Act, the authorities are duty bound to pass a reasoned order on merit of the case. In support of his submissions, he has placed reliance upon the judgement of this Court in the case of M/S Videocon D2H LTD. Her Versus State of U.P. and 3 Others, 2016 U.P.T.C.- 237 and the judgment of Hon'ble Apex Court in the case of Assistant Commissioner, Commercial Tax Department, Works Contract & Leasing, Kota Versus M/s Shukla & Brothers, 2010 0 AIR(SCW) 3277. 5. Per contra, learned counsel for State supported the impugned order and submitted that the petitioner was given ample opportunity to present his case, but the petitioner avoided the hearing and, therefore, the impugned order has rightly been passed. 6. After hearing learned counsel for the parties, the Court has perused the records. 7. It is not in dispute that the last date fixed was 18.01.2022 and the petitioner did not appear. Instead of passing the order on the date fixed the authority concerned has passed an order dismissing the appeal on 20.01.2022, which shows that on the date on which the impugned order was passed, i.e., on 20.01.2022, the petitioner was never put to notice which itself is in violation of principles of natural justice. In turn, the authorities have passed an ex-parte impugned order. The petitioner might have sought adjournment earlier and did not even appear on the earlier occasion, but if the authority wants to pass an order on the next date fixed, it was incumbent upon the authority to pass an order on the date fixed. If the authority does not pass order on the date fixed, in case of non- appearance on behalf of the counsel for the appellant, if the next date is fixed, then the notice or intimation must be made to the party concerned. This Court in the case of M/S Videocon D2H LTD. Her (supra) has expressed the similar view. On this ground the impugned order cannot be sustained. 8. Further Section 107 (12) of the CGST Act specifically provides for passing a reasoned and speaking order. The impugned order shows that no proper reason has been assigned. Once the authority wants to pass an order the reason for passing such order must be given. In the case in hand, the authority has simply dismissed the appeal without proper reason. The Apex Court in the case of Assistant Commissioner, Commercial Tax Department (supra) has deprecated such practice. On this ground also, the impugned order cannot be sustained. 9. In view of above, the impugned order dated 20.01.2022 passed by the respondent no.1 cannot be sustained in the eyes of law. The matter requires reconsideration. 10. For the said purpose, the impugned order passed by the respondent no.1 is hereby quashed. 11. The petition is, accordingly, allowed. 12. The matter is remanded back to the Additional Commissioner Grade-2 (Appeal) Judicial Area-3, Commercial Tax, Prayagraj, i.e., respondent no.1 to decide the appeal on merits, after giving due opportunity of hearing to the petitioner, expeditiously, preferably, within a period of three months from the date of production of a certified copy of this order. Order Date :- 5.5.2025 Radhika Digitally signed by :- RADHIKA VISHWAKARMA High Court of Judicature at Allahabad "