Allahabad HC quashes order issued without issuing SCN and providing opportunity of being heard

Ratan Industries Limited v. State of Uttar Pradesh – [2021] 127 taxmann.com 576 (Allahabad)

Short Overview of the case:

The petitioner was carrying on the business of manufacture and sale of the auto parts.

It submitted returns with all details as required and the amount of tax was paid after deducting the ITC.

 It came to know on 15-12-2019 that some orders have been passed as per DRC-07 dated 24-1-2019 by the department.

 It filed writ petition alleging that prior to passing of the order of demand, no show cause notice was ever served upon the petitioner and when it filed an appeal and the appeal was also dismissed as being beyond the prescribed period of limitation.

The Honorable High Court demanded a counter affidavit from department and observed that the show cause notice was sent on the wrong E-mail address.

Moreover, in respect of the demand notice, only a summary of the order dated 24-1-2019 was annexed and no order giving the reasoning for levy of demand was filed in the counter affidavit.

 Therefore, it was clear that show cause notice was never served upon the petitioner as well as the reasons for quantification of the demand had also never been served upon the petitioner.

 In view thereof, it was clear that the statutory provisions as well as the principles of natural justice had been clearly violated.

 Therefore, the order was liable to be set aside and the writ petition was allowed.