Anand Swaroop Rastogi Vs State of U.P. And 2 Others
Date: August 9, 2024
Subject Matter
Demand based solely on the Income Tax Department's findings is unsustainable
Summary
The petitioner, a registered taxpayer under the U.P.G.S.T. Act with GSTIN No. 09AABHA6768A1ZI, engaged in the business of trading jewelry and bullion, challenged two orders passed by state authorities. The petitioner had ceased business operations on September 30, 2017, and later established a new partnership firm with a different PAN. The case arose when allegations from a survey conducted by the Income Tax Department initiated proceedings against the petitioner under Section 73 of the U.P.G.S.T. Act. The petitioner argued that the initiated proceedings were incorrect as they were based on the PAN of the old business, which had been closed. The petitioner contended that they provided a specific response to the show cause notice, indicating that the PAN concerning the investigation was not the same as the one registered for their ongoing business. Despite these submissions, the authorities did not consider the evidence provided, leading to the issuance of the impugned order. The court found that the authorities had failed to conduct independent findings and relied solely on the Income Tax Department's findings, which were deemed insufficient in the absence of thorough analysis. Consequently, the court quashed the impugned orders on the basis that they were not sustainable in law and remanded the matter back to the proper officer for a fresh assessment. The officer was instructed to conduct a new hearing within three months and resolve the matter based on a reasoned and justified order, preserving any amounts deposited by the petitioner pending the outcome of this new assessment.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Rishi Raj Kapoor, learned counsel for the petitioner and Sri Ravi Shanker Pandey, learned Additional Chief Standing Counsel for the State-respondents.
2. By means of instant writ petition, the petitioner has assailed the order dated 06.03.2021 passed by respondent no.2 and order dated 27.12.2019 passed by respondent no.3, respectively.
3. Learned counsel for the petitioner submits that the petitioner was registered under the U.P.G.S.T. Act, having GSTIN No. 09AABHA6768A1ZI and engaged in the business of trading of jewellary and bullion, the said GST number was granted on PAN of Anand Swaroop Rastogi, HUF. Thereafter, the petitioner’s business was closed with effect from 30.09.2017. Thereafter, another partnership firm was created having independent PAN. Thereafter, on the said business premises, a survey was conducted by the Income Tax Department and on the basis of allegation at the time of survey, present proceedings under Section 73 of the U.P.G.S.T. Act have wrongly been initiated against the petitioner. Thereafter, a show cause notice was issued to the petitioner to which the petitioner submitted a specific reply, bringing on record the material that the Pan for which the proceedings were initiated are different and the petitioner had closed his business for the said Pan, but without considering the same, the impugned order has been passed.
4. He further submits that the specific objection was raised before the authority and the ground was taken, but without considering the same, the impugned order has been passed, which is totally wrong and illegal.
5. Per contra, learned Additional Chief Standing Counsel supports the impugned orders and submits that the proceedings have rightly been initiated.
6. After hearing the parties, the Court has perused the record.
7. It is not in dispute that the petitioner had closed his business with effect from 30.09.2017. Further, no material has been brought on record to suggest that the Pan of (HUF), which was used by the proprietor for registration, was also used for the partnership firm to which the Income Tax Department conducted a survey in which excess stock was found, this fact was brought to the notice of the authority concerned, but without any independent finding, only on the finding recorded by the Income Tax Department, the impugned order has been passed.
8. In absence of any independent finding by the proper officer as well as confirmed by the appellate authority, the impugned orders have been passed, which cannot be sustained in the eyes of law and the same are hereby quashed.
9. Accordingly, the writ petition is allowed. The matter is remanded to the proper officer for initiating de novo proceedings by reasoned and speaking order, after hearing all the stakeholders, within a period of three months from the date of production of certified copy of this order.
10. Any amount deposited by the petitioner pursuant to the impugned orders, shall be subject to the outcome of the order to be passed afresh by the proper officer.