Facts of the Case

The petitioner, M/S Radhey Narayan Industries Private Limited, Barabanki, through its Director Shri Udit Singh, challenged an order dated 18.09.2025 passed under Section 73 of the U.P. Goods and Services Tax Act, 2017, as well as a subsequent order dated 26.09.2025 dismissing its appeal as beyond limitation. The petitioner's grievance was that although it had responded to the show cause notice on three separate dates and filed replies which were extracted verbatim in the impugned order, no notice was ever issued fixing a date for oral hearing, and no personal hearing was in fact offered before the adjudicating authority proceeded to deal with the merits of the replies and pass the demand order.

Issues Involved

  1. Whether an assessment order passed under Section 73 can be sustained where no opportunity of personal hearing was granted despite the petitioner having filed replies to the show cause notice.
  2. Whether the mandate of Section 75(4) of the GST Act for personal hearing before an adverse order applies even where substantive law on adjudication procedure has evolved.

Petitioner's Arguments

  • No date for personal hearing was ever fixed, and the order was passed purely on the basis of written replies without an oral hearing.
  • This issue stood squarely covered by the Division Bench ruling in Mahaveer Trading Company vs. Deputy Commissioner, State Tax, Writ Tax No. 303 of 2024, which held that opportunity of hearing cannot be denied to a noticee facing adjudication.

Respondent's Arguments

  • Learned Standing Counsel, on instructions, conceded that no date was fixed for personal hearing in the proceedings leading to the impugned order.

Court Order / Findings

  • Extracting paragraphs 5 to 11 of Mahaveer Trading Company, the Court reiterated that Section 75(4) makes personal hearing mandatory before any adverse decision, and that revenue authorities cannot deny this right merely because the assessee filed written replies.
  • The Court noted an Office Memo dated 12.11.2024 issued by the Commissioner, Commercial Tax, U.P., flagging systemic defects in recording personal hearing dates — including hearing dates preceding or coinciding with reply dates, contrary to the requirement that the order be passed on the date of the personal hearing.
  • Applying this dictum, the Court held the impugned orders dated 18.09.2025 and 26.09.2025 could not be sustained and quashed both orders, allowing the writ petition.
  • The matter was remanded to the assessing authority to pass a fresh order after granting the petitioner an opportunity of personal hearing.

Important Clarification

  • Personal hearing under Section 75(4) is not a mere formality that can be substituted by written replies to a show cause notice; it must be offered as a distinct opportunity, and its denial vitiates the resulting order regardless of how many written replies were filed.
  • Where the department's own internal memoranda acknowledge systemic non-compliance with personal-hearing timelines, courts will readily extend relief to affected assessees on this ground.
  • The fact that an assessee actively participated at the reply stage, appearing before the authority on three occasions, does not amount to a waiver of the separate right to be heard orally before an adverse order is finalised.

Sections Involved

  • Section 73, UPGST Act, 2017 – determination of tax not paid for reasons other than fraud or wilful misstatement.
  • Section 75(4), CGST/UPGST Act, 2017 – mandates opportunity of personal hearing before any adverse decision is passed on a person chargeable with tax or penalty.
  • Section 107, CGST/UPGST Act, 2017 – appellate remedy, the dismissal of the petitioner's appeal as time-barred being the second order quashed in this case.

Decision – In Favour of

Allowed in favour of the Assessee — both the Section 73 order and the appeal dismissal were quashed for denial of personal hearing, and the matter remanded for fresh adjudication.

Case Details

  • Court: High Court of Judicature at Allahabad, Lucknow Bench
  • Case No.: Writ Tax No. 1113 of 2025
  • Coram: Hon'ble Jaspreet Singh, J.
  • Date of Order: 16 October 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.