The Hon’ble High Court of Allahabad vide its order dated 10.08.2023 in the matter of M/s Viabhav Edible Pvt. Ltd. Vs. State of U.P. and 2 Others in Writ Tax No. 812 of 2021, held that no jurisdiction survives to determine the tax by an order under Section 74 when the foundation of the charge in the proceedings under Section 74, already set aside in entirety in the earlier proceedings under Section 67 of the Act, which led to passing of an order under Section 130 (2) of the Act making the same allegations.

The Petitioner filed the petition before the Hon’ble High Court assailing the order dated 17.08.2021 passed by Joint Commissioner Circle, Commercial Tax, Zone – 1, Kanpur, under Section 74(9) of the U.P. GST Act, whereby tax Rs. 10,59,85,433.90, interest Rs. 7,13,96,434.00 and penalty Rs. 10,59,85,433.90 totalling to Rs. 28,33,67,301.80 have been imposed.

Held: –

• The Hon’ble Court after considering the submissions made and facts of the case, found that the present petition has been entertained, on the contention that there was no surviving jurisdiction to pass that order insofar as, the adjudication proceedings arose from an earlier proceedings under Section 67 of the Act that led to an order dated 18.2.2019 being passed under Section 130(2) of the Act making the same allegations as have arisen in the adjudication proceedings giving rise to the present petition.
• That the said order passed under Section 130(2) dated 18.02.2019 was set aside in entirety by the First Appellate Authority vide its order dated 25.06.2020. That order has attained finality.
• It was found by the Hon’ble High Court that on the behalf of the respondents, it could not be disputed that the order dated 18.2.2019 passed under Section 130(2) came to be set aside by the First Appellate Authority vide its order dated 25.06.2020. Neither that order was challenged nor any new facts were discovered as may have led to any fresh proceedings being drawn up, for adjudication.
• The fact allegations giving rise to the adjudication proceedings impugned in the present petition, remained the same as had been considered by the First Appellate Authority in its order dated 25.6.2020.
• Further, it was found by the Hon’ble Court that While proceedings under Section 67 and Section 74 are distinct in scope and purpose, at the same time, the essential facts found non-existent in the proceedings under Section 67 would have a material bearing on proceedings under Section 74 of the Act drawn up on the same basis.
• Though, in the present case, since the substratum of the charge in the proceedings under Section 74 of the Act stood wiped out in entirety, occasioned by the First Appellate order dated 25.5.2020 passed with reference to proceedings under Section 130 of the Act, there survived no jurisdictional fact as may have given rise to the adjudication proceedings, on the same facts.

The Hon’ble Court with the above findings and observations, allowed the writ petition by setting aside impugned order dated 17.08.2021 and impugned notices dated 09.04.2021 & 25.05.2021.

To read the complete judgment 2023 Taxo.online 793