Facts of the Case

The petitioner, M/S A Constructions, through its proprietor Ram Krishna Tripathi, challenged an order dated 20.07.2022 passed under Section 74 of the GST Act and the subsequent appellate order dated 24.07.2025 dismissing the appeal as time-barred, before the Allahabad High Court, Lucknow Bench. The petitioner's contention was that the department's own circular required two separate dates to be fixed — one for filing the reply to the show-cause notice and another, distinct date for personal hearing — which had not been done in this case.

Issues Involved

  1. Whether a Section 74 order passed without fixing two separate dates — one for filing the reply and another distinct date for personal hearing, as required by the department's own circular — can be sustained.

Petitioner's Arguments

  • The impugned proceedings did not comply with the departmental circular's mandate to fix distinct dates for reply and personal hearing, and the issue stood covered by Mahaveer Trading Company vs. Deputy Commissioner, State Tax (Writ Tax No. 303 of 2024).

Respondent's Arguments

  • No specific rebuttal is separately recorded; the State's Standing Counsel's position is reflected in the Court's application of the covered precedent without contest.

Court Order / Findings

  • Following Mahaveer Trading Company, the Court allowed the petition on this sole ground.
  • The orders dated 20.07.2022 and 24.07.2025 were quashed, and the matter was remanded to the assessing authority to pass a fresh order after affording an opportunity of hearing to the petitioner.

Important Clarification

  • Where the department's own internal circular requires distinct dates for filing a reply to a show-cause notice and for personal hearing, failure to fix two separate dates vitiates the resulting adjudication order under Section 74, independent of the merits of the tax demand.
  • Such a defect leads only to a remand for fresh adjudication with proper procedural compliance, not a final decision quashing the demand on merits.

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.

Decision – In Favour of

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

Case Details

Court: High Court of Judicature at Allahabad, Lucknow Bench — Case No.: Writ Tax No. 753 of 2025 — Coram: Hon'ble Mr. Justice Pankaj Bhatia — Date of Order: 8 August 2025.

Link to Download the Order

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