Facts of the Case

M/S Rama Hosiery, through its proprietor Anjani Gupta, challenged an order dated 23 December 2023 passed under Section 73 of the GST Act, as well as the subsequent appellate order dated 26 September 2024 dismissing its appeal as being beyond limitation. The sole ground pressed before the Allahabad High Court, Lucknow Bench, was that no opportunity of personal hearing had been granted before the adverse order was passed — a contention the State's Standing Counsel did not controvert.

Issues Involved

  1. Whether a GST demand order passed under Section 73 without granting the taxpayer any opportunity of personal hearing can be sustained.
  2. Whether such a fundamental natural justice defect can be raised and remedied notwithstanding dismissal of the statutory appeal as time-barred.

Petitioner's Arguments

  • No opportunity of personal hearing was granted before the impugned order was passed, and this very issue had already been considered and decided in the taxpayer's favour by the same High Court in Writ Tax No. 303 of 2024 (Mahaveer Trading Company v. Deputy Commissioner, State Tax and Anr.), decided on 4 March 2024.

Respondent's Arguments

  • The learned Standing Counsel for the State did not dispute or controvert the petitioner's contention that no personal hearing had been granted.

Court Order / Findings

  • Given the State's non-controversion of the core factual assertion, the Court found it unnecessary to examine any other ground and disposed of the matter squarely on the denial-of-hearing point.
  • Following the ratio of Mahaveer Trading Company, it held that denial of a personal hearing before passing an adverse order under Section 73 renders the order unsustainable, regardless of the appeal having been dismissed on limitation.
  • Both the original order dated 23.12.2023 and the appellate order dated 26.09.2024 were quashed, and the matter remanded to the assessing authority to pass a fresh order after granting the petitioner an opportunity of hearing.

Important Clarification

  • Where the State's counsel does not dispute that no personal hearing was granted before an adverse GST order, the Allahabad High Court will quash both the original order and any subsequent limitation-based appellate dismissal, applying its settled ratio in Mahaveer Trading Company that a personal hearing is a mandatory pre-condition to an adverse order under Section 73.
  • This natural-justice defect operates independently of, and prevails over, a technical limitation bar on the statutory appeal.

Sections Involved

  • Section 73, GST Act – determination of tax not involving fraud or wilful misstatement, requiring a personal hearing before an adverse order under Section 75(4).

Decision – In Favour of

The decision is in favour of the assessee, with both the demand order and the limitation-based dismissal of the appeal quashed and the matter remanded for a fresh hearing.

Case Details

Court: High Court of Judicature at Allahabad, Lucknow Bench. Case No.: Writ Tax No. 655 of 2025. Coram: Hon'ble Pankaj Bhatia, J. Date of Order: 22 July 2025.

Link to Download the Order

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