Facts of the Case

M/s Rahil Enterprises, a proprietorship, challenged an order dated 22.12.2023 passed under Section 73 of the GST Act along with an appellate order dated 07.04.2025 dismissing its appeal as beyond limitation, before the High Court of Judicature at Allahabad, Lucknow Bench. The petitioner's counsel contended that no genuine opportunity of hearing had been granted before the Section 73 order was passed. The State's Standing Counsel confirmed that the date fixed for personal hearing in the show cause notice was, in point of time, earlier than the date fixed for filing the reply. The matter was decided by a single Judge on 16.07.2025, applying the Court's own precedent on an identical procedural defect.

Issues Involved

  1. Whether fixing the personal hearing date before the date fixed for filing a reply to the show cause notice deprives the assessee of a genuine hearing under Section 73/75(4).
  2. Whether the consequential order and the subsequent limitation-based appellate dismissal are both liable to be quashed on this ground.
  3. Whether the matter should be remanded for a fresh order after a proper hearing.

Petitioner's Arguments

  • The order dated 22.12.2023 under Section 73 was passed without a genuine opportunity of hearing, since the personal hearing date in the show cause notice preceded the date fixed for filing the reply.
  • This sequencing rendered the notice-based hearing illusory, in breach of natural justice, and squarely fell within the ratio of Mahaveer Trading Company vs. Deputy Commissioner, State Tax, decided by the same Court on 04.03.2024.
  • The subsequent appellate dismissal on limitation could not be sustained once the underlying order itself was shown to be procedurally defective.

Respondent's Arguments

  • Learned Standing Counsel for the State candidly confirmed that the date mentioned for personal hearing in the notice was indeed prior in point of time to the date fixed for filing the reply, without offering any further justification.

Court Order / Findings

  • On the admitted position that the hearing date preceded the reply date, and following its own judgment in Mahaveer Trading Company vs. Deputy Commissioner, State Tax, the Court held that such a sequencing defect vitiates the consequential Section 73 order for denial of a real hearing opportunity.
  • The petition was allowed on this sole ground, and both the original order dated 22.12.2023 and the appellate order dated 07.04.2025 dismissing the appeal as time-barred were quashed.
  • 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 fixes the personal hearing date earlier than the reply-filing date is treated by the Allahabad High Court as no hearing at all, sufficient by itself to vitiate the resultant order.
  • This defect simultaneously undoes any subsequent appellate dismissal grounded on limitation, since the root order itself cannot stand.
  • The Mahaveer Trading Company ratio continues to be applied as binding precedent to a recurring class of similarly defective UPGST notices.

Sections Involved

  • Section 73, UPGST/CGST Act, 2017 - governs determination of tax not paid or short paid for reasons other than fraud or suppression of facts.
  • Section 75(4), UPGST/CGST 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. 626 of 2025
Coram: Hon'ble Mr. Justice Pankaj Bhatia
Date of Decision: 16.07.2025

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