Facts of the Case

Vakil Cloth House, through its proprietor Vakil Ahmad, challenged an order dated 13.08.2024 passed under Section 73 of the GST Act, 2017, as well as the subsequent appellate order dated 28.05.2025 dismissing its appeal as barred by limitation. The petitioner's grievance was that no genuine opportunity of hearing had been granted before the Section 73 order was passed. The Allahabad High Court, Lucknow Bench, per Justice Pankaj Bhatia, decided the writ petition on 17 July 2025, applying the Division Bench ruling in Mahaveer Trading Company v. Deputy Commissioner State Tax (Writ Tax No. 303 of 2024, decided 04.03.2024).

Issues Involved

  1. Whether a Section 73 order is sustainable where the date of personal hearing fixed in the show-cause notice preceded the date fixed for filing the reply.
  2. Whether the appellate authority's dismissal of the consequent appeal on limitation grounds should also be set aside.
  3. Whether the matter should be remanded for fresh adjudication with proper opportunity of hearing.

Petitioner's Arguments

  • No opportunity of hearing was granted prior to passing of the order impugned under Section 73 of the GST Act, rendering it invalid.
  • Sought quashing of both the original order dated 13.08.2024 and the appellate order dated 28.05.2025 dismissing the appeal as time-barred, and a remand for fresh adjudication.

Respondent's Arguments

  • Learned Standing Counsel, on instructions, candidly stated that in the notice issued to the petitioner, the date fixed for personal hearing was prior in point of time to the date fixed for submission of the reply.

Court Order / Findings

  • The Court noted that this precise defect — the personal-hearing date preceding the reply date — had already been considered and disapproved by the Division Bench in Mahaveer Trading Company v. Deputy Commissioner State Tax (Writ Tax No. 303 of 2024, decided 04.03.2024).
  • A show-cause notice that fixes the date of personal hearing before the date fixed for filing reply denies the noticee a genuine opportunity of hearing under Section 73/75(4) of the GST Act, and any consequent order — along with an appellate order dismissing the appeal on limitation — is liable to be quashed.
  • Finding the present case squarely covered by Mahaveer Trading Company, the Court quashed both the impugned order dated 13.08.2024 and the appellate order dated 28.05.2025, and allowed the writ petition.
  • The matter was remanded to the Assessing Authority to pass a fresh order, in accordance with law, after providing adequate opportunity of hearing.

Important Clarification

  • A GST show-cause notice must fix the personal-hearing date after — not before or on — the date fixed for filing the reply; failure to do so is a recurring but well-established ground for quashing the resulting adjudication order.
  • This defect independently justifies interference even where the taxpayer's statutory appeal against the order has already been dismissed as time-barred, since the underlying natural-justice violation vitiates the entire chain of proceedings, not merely the delay in appeal.

Sections Involved

  • Section 73, GST Act, 2017 — determination of tax not paid/short paid, and the personal-hearing safeguard in its adjudication.
  • Section 75(4), GST Act, 2017 — mandatory opportunity of hearing before an adverse order.

Decision – In Favour of

Assessee (petitioner) — both the original and appellate orders quashed; matter remanded for fresh adjudication with proper hearing.

Case Details

Court: High Court of Judicature at Allahabad, Lucknow Bench. Case No.: Writ Tax No. 630 of 2025 (Neutral Citation 2025:AHC-LKO:40715). Coram: Hon'ble Pankaj Bhatia, J. Date of Order: 17 July 2025.

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