Facts of the Case

The petitioner, M/s Poddar Ispat Pvt. Ltd., was issued a show-cause notice dated 14.05.2025 under Section 74(1) read with Section 122 of the Uttarakhand GST Act, 2017, for FY 2023-24, followed by Forms DRC-01A and DRC-01 alleging inadmissible ITC of Rs. 8,49,98,096. The petitioner filed its reply on 26.12.2025 requesting personal hearing, but on the very same date the adjudicating authority passed the impugned order under Section 74(9) confirming the demand and initiating recovery, without any prior intimation of a personal hearing date.

Issues Involved

  1. Whether passing the adjudication order on the very same date the assessee's reply was filed, without any distinct intimation of a personal hearing date, satisfies the mandatory hearing requirement under Section 75(4).
  2. Whether a bare recital in the order that the petitioner was 'heard' suffices as compliance where no separate hearing date was communicated.

Petitioner's Arguments

  • Despite requesting personal hearing, no date was intimated and the order was passed on the very day the reply was filed, denying any real opportunity to be heard; the show-cause notice was also defective for lacking ingredients of Section 74, and the reply was not genuinely considered.

Respondent's Arguments

  • The order itself recited that the petitioner's reply was duly considered and an opportunity of hearing was given; the State's counsel did not dispute, however, that the order was passed the same day the reply was filed and that the notice did not indicate a hearing would occur that day.

Court Order / Findings

  • The Court held that under Section 75(4), opportunity of hearing must be granted on request, and the respondents were required to intimate the date of personal hearing in advance — a mere recital that the assessee was heard on the reply-filing date, without prior notice, is 'nothing but an eyewash' since the assessee, on that date, is in every likelihood unprepared to argue.
  • The impugned order dated 26.12.2025 was set aside as violative of the principles of natural justice under Section 75(4), with liberty to the respondents to fix a fresh hearing date under due intimation and pass a fresh order in accordance with law.
  • All pleas and contentions were left open to be raised before the proper officer.

Important Clarification

  • Section 75(4) requires the adjudicating authority to intimate a personal hearing date in advance, distinct from the reply-filing date; passing an order the same day the reply is filed, without prior notice of a hearing on that date, is treated as an eyewash and does not satisfy natural justice, regardless of a recital in the order claiming a hearing occurred.
  • This defect alone is sufficient to set aside a Section 74 order, without the Court examining the merits of the underlying ITC-denial allegations.

Sections Involved

  • Section 74, Uttarakhand GST Act, 2017 – demand for tax by reason of fraud/wilful misstatement/suppression.
  • Section 122, CGST Act, 2017 – penalty for certain offences, invoked alongside Section 74.
  • Section 75(4), CGST Act, 2017 – mandatory opportunity of hearing on request or where an adverse decision is contemplated.

Decision – In Favour of

The decision is in favour of the assessee. The Section 74 order confirming the Rs.8.49 crore ITC demand was set aside for denial of a genuine personal hearing, with the matter remanded for fresh adjudication.

Case Details

Court: High Court of Uttarakhand at Nainital — Case No.: Writ Petition (M/B) No. 286 of 2026 — Coram: Chief Justice Manoj Kumar Gupta and Justice Subhash Upadhyay — Date of Order: 22 April 2026.

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