Facts of the Case

M/s Om Timber, a proprietorship registered under GSTIN 09ADVPA8032E2ZH, challenged an order dated 17.05.2025 passed under Section 74 of the GST Act by the Deputy Commissioner, Sector 4, State GST, Sitapur, for Financial Year 2021-22. On perusal of the record, it emerged that the order had been passed ex-parte and was not passed on the date originally fixed for hearing; further, no notice of any subsequent date was given to the petitioner. The petitioner relied on a coordinate Bench ruling of the same High Court in M/s Shubham Steel Traders vs. State of U.P. on facts held to be materially identical. The Division Bench of the High Court of Judicature at Allahabad, Lucknow Bench, heard and decided the matter on 10.11.2025.

Issues Involved

  1. Whether an assessing authority that neither passes an order on the date fixed for hearing nor communicates a fresh hearing date can validly proceed to pass an ex-parte order.
  2. Whether such conduct amounts to the authority itself forcing the ex-parte character of the order, in breach of natural justice.
  3. Whether the impugned Section 74 order deserves to be quashed and the matter remanded for a fresh hearing.

Petitioner's Arguments

  • The order was passed ex-parte without being passed on the date originally fixed for hearing (19.04.2025 in the analogous precedent), and no communication of any adjourned date was made to the petitioner.
  • Relying on M/s Shubham Steel Traders vs. State of U.P., it was argued that once a hearing date is fixed, the authority must either decide on that date or fix and communicate a fresh date; failure to do so forces an ex-parte outcome on the assessee through the authority's own default.
  • Such conduct violates the rules of natural justice, which exist to ensure fairness in proceedings, and renders the resultant order unsustainable.

Respondent's Arguments

  • The order does not record any specific factual rebuttal by the State to the petitioner's claim that no subsequent hearing date was communicated; the State's Standing Counsel was heard but did not distinguish the case from Shubham Steel Traders.

Court Order / Findings

  • Finding the facts of the present case similar to M/s Shubham Steel Traders, the Court held it saw no reason to take a different view of the matter.
  • The Court held that by not passing the order on the date fixed for hearing and not communicating the next date fixed in the proceedings, the assessing authority itself forced the ex-parte nature of the order on the petitioner, warranting its quashing.
  • The impugned order dated 17.05.2025 was accordingly quashed and set aside.
  • A direction was issued to the authority concerned to grant an opportunity of personal hearing to the petitioner and thereafter pass a reasoned order in accordance with law.
  • The writ petition was disposed of with this direction.

Important Clarification

  • When a GST authority fixes a hearing date but neither decides the matter on that date nor communicates a fresh date, any resulting ex-parte order is attributable to the authority's own default, not the assessee's non-appearance.
  • Such self-inflicted ex-parte proceedings breach natural justice and are liable to be quashed regardless of the merits of the underlying tax demand.
  • The remedy in such cases is typically a straightforward remand directing a fresh personal hearing followed by a reasoned order, rather than examination of the tax liability itself.

Sections Involved

  • Section 74, CGST/UPGST Act, 2017 — determination of tax not paid or short paid by reason of fraud, wilful misstatement or suppression of facts.
  • Section 75(4), CGST/UPGST Act, 2017 — underlying natural-justice mandate requiring a genuine opportunity of hearing before an adverse order.

Decision – In Favour of

Decided in favour of the assessee. The ex-parte Section 74 order was quashed for the authority's own failure to fix and communicate a hearing date, with a fresh personal hearing directed before any reasoned order is passed.

Case Details

Court: High Court of Judicature at Allahabad, Lucknow Bench
Case No.: Writ Tax No. 1191 of 2025
Coram: Hon'ble Mr. Justice Shekhar B. Saraf and Hon'ble Mr. Justice Prashant Kumar
Date of Decision: 10.11.2025

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