Case Details
Rajesh Kumar Singh v. Commissioner of Commercial Tax, U.P. Lucknow & Anr.
Allahabad High Court – Chief Justice’s Court
Writ Tax No. 526 of 2025
Judgment dated: 19.02.2025
Relevant Sections: Section 73(9), Section 161, Section 61 of the CGST/UPGST Act, 2017
Category of Dispute: Input Tax Credit (ITC) – Reverse Charge Mechanism
Facts (Paras 1–6)
The petitioner, a registered Goods Transport Agency (GTA), provided cargo transport services under GST where tax liability falls on the recipient under the Reverse Charge Mechanism (RCM). For FY 2018–19, his returns were scrutinized and discrepancies were pointed out under Section 61. A show cause notice under Section 73(1) dated 23.12.2023 fixed both the reply and hearing on 20.01.2024. The petitioner filed his reply on 18.01.2024 asserting that transactions were covered under RCM and produced invoices. Despite this, the Deputy Commissioner passed an order on 30.04.2024 under Section 73(9) partly rejecting his submissions without detailed reasoning. His rectification plea under Section 161 was also rejected on 09.10.2024.
Questions in Dispute (Paras 7–10)
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Whether fixing the same date for reply and personal hearing amounted to denial of natural justice.
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Whether the adjudicating authority erred in ignoring the petitioner’s specific RCM plea supported by documents.
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Whether rejection of rectification under Section 161 was valid when the main order itself was defective.
Observations of the Court (Paras 11–15)
The Court noted that fixing the same date for filing reply and hearing (20.01.2024) was contrary to principles of natural justice, reducing the hearing to a mere formality. It further observed that though the petitioner’s reply specifically raised RCM liability, the adjudicating authority’s order dated 30.04.2024 was cursory and non-speaking, merely stating that evidence of tax deposit under RCM was not produced. Out of 10 points, seven were accepted without reasons, while three were rejected summarily. The Court held that such an approach showed non-application of mind and failure to consider relevant contentions.
Judgment / Verdict (Paras 16–18)
The Court held that the impugned order dated 30.04.2024 was vitiated both by violation of natural justice and for being a non-speaking order. Consequently:
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The order dated 30.04.2024 was quashed.
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The rejection of rectification under Section 161 lost relevance.
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The matter was remanded back to the Deputy Commissioner, State Tax, Mirzapur, for fresh adjudication after affording proper hearing to the petitioner.
Case Law Reference Table
| Case referred | Verdict / Principle |
|---|---|
| Present case references prior Allahabad HC rulings (not explicitly named but noted) | Court has consistently frowned upon fixing the same date for reply and hearing as it violates natural justice (Para 12). |
Between Fine Lines
For businesses operating under RCM like Goods Transport Agencies, this judgment underscores that tax authorities cannot brush aside RCM claims with perfunctory observations. Notices fixing the same date for reply and hearing will not withstand judicial scrutiny. Industry should ensure timely and well-documented replies but can confidently contest any orders passed in violation of natural justice or lacking reasoned discussion.
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