Facts of the Case

The petitioner, M/S Hoin Mal Sons Enterprises Pvt. Limited, through its Director, Mr. Chandan Chandwani, challenged an order dated 18.05.2023 passed under Section 74 of the GST Act, along with an order dated 05.07.2025 dismissing its appeal as beyond limitation. The petitioner's grievance was that no opportunity of personal hearing had been granted before the Section 74 order was passed, and that in fact the same date had been mentioned in the show cause notice both for filing the reply and for the personal hearing.

Issues Involved

  1. Whether an adjudication order under Section 74 can be sustained where the show cause notice fixed the same date for filing the reply and for the personal hearing, effectively denying a genuine hearing opportunity.

Petitioner's Arguments

  • No real opportunity of personal hearing was granted since the show cause notice mentioned the same date for filing the reply and for the personal hearing, and the issue was covered by Mahaveer Trading Company vs. Deputy Commissioner, State Tax, Writ Tax No. 303 of 2024, and Bharat Mint and Allied Chemicals v. Commissioner Commercial Tax & Ors., 2022 (4) ADJ 75.

Respondent's Arguments

  • Learned Standing Counsel, on instructions, confirmed that the show cause notice indeed mentioned the same date for filing of reply and for personal hearing, and further submitted that in its reply the petitioner had itself stated it did not want a hearing.

Court Order / Findings

  • Notwithstanding the Department's submission that the petitioner had stated it did not want a hearing, the Court held that fixing an identical date for filing the reply and for the personal hearing renders any purported opportunity of hearing illusory, and applied the settled principle from Mahaveer Trading Company and Bharat Mint and Allied Chemicals that personal hearing cannot be dispensed with before an adverse order.
  • On this sole ground, the writ petition was allowed and the orders dated 18.05.2023 and 05.07.2025 were quashed.
  • The matter was remanded to the assessing authority to pass a fresh order after granting the petitioner a genuine opportunity of personal hearing.

Important Clarification

  • A show cause notice that fixes the same date for filing the reply and for the personal hearing does not afford a genuine opportunity of hearing, since the noticee cannot meaningfully be heard on a reply that is due for filing on the very same day — such a defect vitiates the resulting order under Section 74 just as it would under Section 73.
  • Even where the department contends the assessee itself did not seek a hearing, courts continue to apply the Mahaveer Trading Company line of authority holding that opportunity of personal hearing before an adverse adjudication order is a mandatory procedural safeguard, not one that can be waived by a defectively structured notice.

Sections Involved

  • Section 74, CGST Act, 2017 – determination of tax involving fraud, wilful misstatement or suppression of facts.
  • Section 75(4), CGST Act, 2017 – mandatory opportunity of personal hearing before an adverse order is passed on a person chargeable with tax or penalty.

Decision – In Favour of

Allowed in favour of the Assessee — the Section 74 order and the appeal dismissal were quashed for denial of a genuine 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. 835 of 2025
  • Coram: Hon'ble Pankaj Bhatia, J.
  • Date of Order: 27 August 2025

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