Facts of the Case

M/S Afflatus Design Studio challenged an adjudicating order dated 31.08.2024 passed under Section 73 of the U.P. GST Act, 2017 for tax period 2019-20, raising a demand of Rs.74,28,420. The show-cause notice dated 31.05.2024 did not specify a date for personal hearing, and the impugned order was passed beyond two months from the date the petitioner's reply was furnished, without that reply being considered. The petitioner explained the delay in approaching the Court on the ground that its registration had been cancelled in November 2019, so it was not regularly checking its GST portal/dashboard and remained unaware of the order, which was not served through any other mode.

Issues Involved

  1. Whether an order under Section 73, passed without specifying a personal hearing date in the show-cause notice and beyond two months from the reply without considering it, is sustainable.
  2. Whether the resulting delay in filing the writ petition, explained by cancellation of registration and consequent non-monitoring of the portal, should bar relief.

Petitioner's Arguments

  • The show-cause notice failed to specify the date of personal hearing, and the order was passed beyond two months from the reply date without considering the reply at all.
  • Delay in approaching the Court arose because the petitioner's registration had been cancelled, it was not regularly visiting the GST portal, and no other mode of service of the order was adopted by the department.

Respondent's Arguments

  • Learned counsel for the revenue raised a preliminary objection of gross delay in filing the petition, contending it should not be entertained.

Court Order / Findings

  • The Court found that both the merits objection — a defective show-cause notice and an unconsidered reply — and the delay explanation merited consideration.
  • However, since even a fuller hearing would likely only result in a direction for fresh hearing, the Court held no useful purpose would be served by keeping the petition pending for a counter affidavit.
  • The impugned order was set aside subject to the petitioner depositing Rs.7,50,000 within one month; the adjudicating authority was directed to fix a fresh personal hearing date (communicated through regular mode, since the reply already stood filed) and make best efforts to conclude proceedings by 31.03.2026, with the petitioner undertaking to cooperate without seeking undue adjournments.
  • The deposit made under this order was made subject to the outcome of the fresh order to be passed.

Important Clarification

  • Even where a writ petition is delayed and the delay is only partly explained, courts may bypass a full merits hearing and grant conditional interim relief where the underlying illegality is apparent on the face of the record.
  • An SCN silent on the personal hearing date, combined with an order passed without considering the reply, is treated as sufficiently serious to warrant quashing subject to a part-deposit, since a full hearing would likely arrive at the same remand outcome regardless.

Sections Involved

  • Section 73, U.P. GST Act, 2017 — determination of tax not paid or short paid for reasons other than fraud, under which the impugned demand was raised.
  • Section 75(4), CGST Act, 2017 — mandates an opportunity of personal hearing before an adverse order.
  • Section 29, CGST Act, 2017 — cancellation of registration, relevant as background to the petitioner's non-monitoring of the GST portal.

Decision – In Favour of

The decision is in favour of the assessee. The Section 73 order was set aside conditional on a part-deposit, with the matter remanded for a fresh personal hearing.

Case Details

Court: High Court of Judicature at Allahabad
Case No.: Writ Tax No. 5134 of 2025
Coram: Hon'ble Justice Saumitra Dayal Singh and Hon'ble Justice Indrajeet Shukla
Date of Order: October 7, 2025

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.