The Allahabad High Court has strongly reprimanded GST authorities for passing orders in contravention of binding judicial precedents in the case of M/s Rajdhani Udyog vs. State of U.P. & Others.
The court, led by Justice Piyush Agrawal, directed erring officers to file personal affidavits and even the case was adjourned subject to payment of Rs.5,000/- to be made to the petitioner from the salary of the respondent who has passed the order, before the next date fixed, citing disregard of earlier High Court and Supreme Court rulings.
Chronology of Events
- 22 October 2019:
The business premises of M/s Rajdhani Udyog were surveyed by GST officials. Based on the survey, proceedings were initiated under Section 130 read with Section 122 of the GST Act. The petitioner contended that the case should have been dealt with under Sections 73/74 instead. - 9 November 2024:
The Additional Commissioner, Grade-II (Appeal-1), Commercial Tax Department, Varanasi, rejected the petitioner’s appeal. This order became the subject of challenge before the High Court. - 25 July 2024 (Precedent):
In M/s Dinesh Kumar Pradeep Kumar vs. Additional Commissioner, Grade-II, the Allahabad High Court clarified that proceedings under Section 130 were not maintainable in similar circumstances. This judgment was later upheld by the Supreme Court on 17 April 2025 in SLP (Civil) Diary No. 5879 of 2025. - 22 May 2025:
The High Court reaffirmed the same principle in M/s Janta Machine Tools vs. State of U.P. & Others. - 6 August 2025:
The case of Rajdhani Udyog came up before the High Court and was listed for hearing on 7 August 2025. - 7 August 2025:
The High Court noted that despite binding precedents, authorities continued to act arbitrarily. Justice Agrawal warned that disregard for judicial rulings could lead to “judicial chaos.”- The court directed the Additional Commissioner, Grade-II, Varanasi, who passed the order dated 09.11.2024, to file a personal affidavit explaining why he ignored the settled law.
- Until further orders, no coercive action was to be taken against Rajdhani Udyog.
- The matter was listed for 25 August 2025.
- 25 August 2025:
The State filed affidavits, including one from Sushil Kumar Singh, the officer who passed the 2024 order. He claimed that when he decided the appeal, the judgments of 2025 (Janta Machine Tools and Supreme Court ruling) were not available. However, the court pointed out that the 25.07.2024 ruling in Dinesh Kumar Pradeep Kumarexisted and was ignored.- Justice Agrawal imposed a cost of ₹5,000, to be deducted from the officer’s salary and paid to the petitioner.
- The Principal Secretary, Institutional Finance, U.P., was directed to file a personal affidavit explaining systemic lapses.
- The State was also ordered to prepare a structured roadmap to ensure all officers are updated on judicial pronouncements.
- The matter was adjourned to 9 September 2025.
Court’s Strong Observations
The High Court warned that officers cannot act at their “whims and fancies” and must follow judicial precedents. It reminded officials that while citizens are expected to know the law, the duty is even greater on officers to comply with rulings of higher courts. Judicial uniformity was stressed as essential to avoid “judicial chaos.”
Next Hearing
The case will now be heard on 9 September 2025, with the court expecting compliance reports and the roadmap from the State Government.
Case Details
Case Title: M/S Rajdhani Udyog Versus State of UP
Case No.: WRIT TAX No. – 3684 of 2025
Date: 25.8.2025
Counsel For Petitioner: Divya Prakash Tripathi,Ravi Pratap Singh,Tanmay Sadh
Counsel For Respondent: C.S.C.
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