Facts of the Case

M/S Sunil Enterprises challenged an adjudication order dated 31.05.2021 passed by the Deputy Commissioner, State Tax, Sector-10, Prayagraj, under the U.P. GST Act, 2017 (reference ZD0904210095997). The first notice in the proceedings was dated 03.04.2021, but the last notice issued to the petitioner fixed 08.06.2021 for filing a reply and 10.06.2021 for personal hearing -- dates that had not yet arrived when the impugned order was passed and uploaded on 31.05.2021.

Issues Involved

  1. Whether preliminary objections of the order being appealable and the appeal period having expired should bar entertaining the writ petition.
  2. Whether an adjudication order passed before the dates fixed for reply and personal hearing, in the department's own notice, can be sustained.

Petitioner's Arguments

  • The impugned order was passed and uploaded on 31.05.2021, well before the dates of 08.06.2021 (for reply) and 10.06.2021 (for personal hearing) that had themselves been fixed and communicated in the department's own notice.

Respondent's Arguments

  • The Standing Counsel raised preliminary objections that the order was appealable and that the limitation period to file that appeal had already expired, urging the writ petition should not be entertained.

Court Order / Findings

  • Despite the preliminary objections regarding appealability and limitation, the Court found something more fundamental and critical, both to the petitioner's rights and to the general scheme of the U.P. GST Act's implementation, warranting entertainment of the petition.
  • Once a date has been fixed and communicated to the taxpayer for filing a written reply and for personal hearing, no adjudication order may be passed before those dates arrive; doing so flouts the rules of natural justice absolutely and cannot be cured by preliminary objections of alternative remedy or limitation.
  • The preliminary objections raised by the Standing Counsel were overruled, since rules of fairness must prevail to ensure the needs of justice are met.
  • The order dated 31.05.2021 was set aside and the matter remitted to the adjudicating authority to pass a fresh order after granting adequate opportunity of written reply and personal hearing, with adequate reasons recorded; the Registrar was directed to communicate the order to the Commissioner, Commercial Tax, U.P., to ensure such practices are discontinued.

Important Clarification

  • Where a GST department's own show cause notice fixes specific dates for filing a reply and for personal hearing, passing and uploading the adjudication order before those very dates arrive is an absolute violation of natural justice; this defect overrides preliminary objections of alternative statutory remedy or expired appeal limitation, since the underlying order itself is void for having pre-empted the taxpayer's fixed opportunity.

Sections Involved

  • Section 75(4), UP GST Act, 2017 - mandatory opportunity of hearing before an adverse order.
  • Section 107, UP GST Act, 2017 - statutory appeal against adjudication orders.

Decision – In Favour of

The writ petition was allowed in favour of the Assessee, with the order set aside and remitted for fresh adjudication after proper opportunity.

Case Details

Court: Allahabad High Court
Case No.: Writ Tax No. 730 of 2023 (Neutral Citation 2023:AHC:119080-DB)
Coram: Justice Saumitra Dayal Singh and Justice Rajendra Kumar-IV
Date of Order: 29.05.2023

Link to Download the Order

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