Facts of the Case

The petitioner, M/S Bhutpurva Sainik Security Services Private Limited (GSTIN 09AACCB4751G1ZR), challenged an order dated 01.04.2024 passed under Section 74 of the U.P. GST Act, 2017, and the subsequent order dated 04.10.2025 dismissing its appeal as time-barred, before the Allahabad High Court, Lucknow Bench. Though the petitioner had appeared and filed replies on three separate dates (23.09.2022, 07.10.2022 and 27.10.2022) in response to the show-cause notice, no further notice or opportunity of personal hearing was granted before the adjudicating authority proceeded to pass a merit order based on those replies.

Issues Involved

  1. Whether an adjudication order under Section 74 can be sustained where the assessee filed replies to a show-cause notice but was never granted a distinct opportunity of personal hearing before the order was passed.
  2. Whether the widespread departmental practice of marking 'N.A.' against the personal hearing date/time column in adjudication orders satisfies Section 75(4) of the GST Act.

Petitioner's Arguments

  • Despite responding to the show-cause notice on three occasions, the petitioner was never granted an opportunity of personal hearing, in violation of Section 75(4) of the GST Act, and the issue was covered by the Division Bench ruling in Mahaveer Trading Company v. Deputy Commissioner, State Tax (2024:AHC:38820-DB).

Respondent's Arguments

  • The Additional Chief Standing Counsel, on instructions, conceded that no date was fixed for personal hearing in the case, and separately placed on record an Office Memo issued by the Commissioner, Commercial Tax, U.P., acknowledging the systemic practice across field formations of marking 'N.A.' instead of a specific hearing date/time.

Court Order / Findings

  • Reproducing paragraphs 5-11 of Mahaveer Trading Company, the Court reiterated that opportunity of personal hearing is basic to procedural fairness under Section 75(4) and cannot be dispensed with merely because replies were filed and considered on the papers.
  • The Court noted the Commissioner's own Office Memo No. 1406 dated 12.11.2024 flagging five specific malpractices across field formations — including marking 'N.A.' for hearing date/time, fixing hearing dates before the reply due date, and orders not being passed on the date of hearing — and directing these be discontinued.
  • Applying this dictum, the Court quashed both the order dated 01.04.2024 and the appellate order dated 04.10.2025, remanding the matter for a fresh order after affording a genuine opportunity of personal hearing.

Important Clarification

  • Under Section 75(4) of the GST Act, opportunity of personal hearing must be granted before any adverse adjudication order, and this requirement is not satisfied by treating written replies alone as sufficient — an assessee is entitled to a distinct, communicated hearing date unless that right is knowingly waived.
  • The State's own Commissioner has, via internal Office Memo, acknowledged and directed discontinuation of the practice of marking 'N.A.' for personal hearing date/time, of fixing hearing dates before the reply-filing date, and of orders not matching the date of hearing — practices that render adjudication orders vulnerable to being quashed.

Sections Involved

  • Section 74, CGST/UPGST Act, 2017 – demand for tax by reason of fraud/wilful misstatement/suppression.
  • Section 75(4), CGST Act, 2017 – mandatory personal hearing where an adverse decision is contemplated or requested.
  • Sections 73(9)/74(9), CGST Act, 2017 – provisions requiring the adjudication order to correspond to the date of personal hearing.

Decision – In Favour of

The decision is in favour of the assessee. Both the Section 74 order and the appellate dismissal were quashed, with the matter remanded for fresh adjudication after a genuine personal hearing.

Case Details

Court: High Court of Judicature at Allahabad, Lucknow Bench — Case No.: Writ Tax No. 1285 of 2025 — Coram: Hon'ble Mr. Justice Jaspreet Singh — Date of Order: 12 November 2025.

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