HC Quashes Appellate Order u/s 74 for Absence of Detailed Adjudication Order on GST Portal

This case is related to two companies (M/S Kendid Sales and Marketing Private Limited), which filed a petition before the Allahabad High Court, challenging two orders dated October 18, 2022, and September 5, 2024, issued under Section 74 of the Uttar Pradesh GST Act. These orders were related to tax liabilities on companies for the financial year 2021-2022.

The company claimed that both orders were unfair and not properly explained. At the start of the hearing, the state counsel informed the court that, following a previous direction, the tax authorities were asked to provide instructions about the case. These instructions were submitted to the court and formally taken on record. According to those instructions, no detailed speaking order was issued in connection with the earlier tax proceedings under Section 74, and more importantly, nothing had been uploaded on the GST portal, which is where taxpayers are supposed to access their orders.

On hearing this, the company lawyer pointed out that the High Court has consistently ruled that even if a case is dismissed on technical grounds like delay in appeal (latches), the order rejecting the appeal must still be detailed and reasoned. This is to ensure that the taxpayer knows exactly why the authority decided against them.

To announce the decision, the High Court took reference from previous judgements. All those highlighted the legal requirement that authorities must issue speaking orders, i.e., decisions that explain the logic and legal reasoning behind them, even when dismissing a case for delay.

After listening to both sides, and with mutual consent from both the petitioner and the State, the Court decided the case without requiring a counter affidavit from the government (a formal written reply). This was done because the basic facts were not in dispute; both sides agreed that a proper order had not been issued.

Given these circumstances, and based on the principles established in previous High Court judgments, the Court held that the impugned order passed by the appellate authority (likely rejecting the taxpayer’s appeal) was legally unsustainable. The Court quashed that order.

As a result, the writ petition was partly allowed. The Court did not give full relief at this stage but instead remanded the matter back to the appellate authority to start the appeal process fresh (de novo).

The Court directed the appellate authority to issue a fresh, reasoned, and speaking order after giving the petitioner a proper opportunity for a personal hearing. This process must be completed within three months from the date the petitioner submits a certified copy of this High Court order.