Facts of the Case

M/s Coolsun Enterprises, a proprietorship registered under GSTIN 09AGKPA0773E1ZN for the year 2017-18, challenged an order dated 04.01.2023 passed under Section 73 of the GST Act, a rectification/consequential order dated 30.12.2023, and a subsequent appellate order dated 14.05.2025 by which its appeal was dismissed as being beyond limitation. Before the High Court of Judicature at Allahabad, Lucknow Bench, the petitioner's counsel contended that no proper opportunity of hearing had been granted while passing the Section 73 order. The State's Standing Counsel, on instructions, admitted that the show cause notice had specified a date for personal hearing that fell earlier than the date fixed for filing the reply. The matter was heard and decided by a single Judge on 24.09.2025.

Issues Involved

  1. Whether a show cause notice fixing the personal hearing date earlier than the reply-filing date vitiates the consequential Section 73 order for denial of a real opportunity of hearing.
  2. Whether the resultant appellate dismissal on limitation grounds also falls along with the underlying defective order.
  3. Whether the matter should be remanded for fresh adjudication after correcting this procedural defect.

Petitioner's Arguments

  • No genuine opportunity of hearing was granted before the order under Section 73 was passed, since the hearing date in the show cause notice preceded the date fixed for the reply.
  • This sequencing defect rendered any notional hearing illusory and meant the order was passed in breach of natural justice.
  • The point was squarely covered by the precedent in Mahaveer Trading Company vs. Deputy Commissioner, State Tax, decided by the same Court on 04.03.2024, and ought to be followed on identical facts.

Respondent's Arguments

  • Learned Standing Counsel, on instructions, candidly admitted that the show cause notice had indeed specified a prior date for personal hearing that came before the date fixed for filing the reply.
  • No substantive defence was offered against the applicability of the Mahaveer Trading Company precedent to the facts of the case.

Court Order / Findings

  • The Court noted that the identical procedural defect — the personal hearing date preceding the reply-filing date — had already been considered and decided in Writ Tax No.303 of 2024, Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Another.
  • Following the ratio in Mahaveer Trading Company, the Court held that a show cause notice fixing the personal hearing before the reply date deprives the assessee of a meaningful hearing and vitiates the consequential order.
  • On this sole ground, the petition was allowed, and the orders dated 04.01.2023, 30.12.2023 and 14.05.2025 were quashed in their entirety.
  • The matter was remanded to the assessing authority to pass a fresh order after granting a proper opportunity of hearing to the petitioner.

Important Clarification

  • A show cause notice that schedules the personal hearing date before the date fixed for filing a reply defeats the very purpose of the hearing and is treated as no hearing at all.
  • Such a sequencing defect is sufficient by itself to vitiate the Section 73 order, and consequently any appellate dismissal founded on that order or on limitation also cannot survive.
  • The Allahabad High Court's Mahaveer Trading Company ruling has become a standard precedent applied to numerous similarly defective GST notices from the State.

Sections Involved

  • Section 73, CGST/UPGST Act, 2017 — governs determination of tax not paid or short paid for reasons other than fraud or suppression of facts.
  • Section 75(4), CGST/UPGST Act, 2017 — the underlying mandate requiring a genuine opportunity of personal hearing before an adverse order.

Decision – In Favour of

Decided in favour of the assessee. Both the Section 73 order and the time-barred appellate dismissal were quashed, and the matter remanded for a fresh order after a proper hearing.

Case Details

Court: High Court of Judicature at Allahabad, Lucknow Bench
Case No.: Writ Tax No. 1020 of 2025
Coram: Hon'ble Mr. Justice Pankaj Bhatia
Date of Decision: 24.09.2025

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