Facts of the Case

Shri Jai Durege Builders challenged an order dated 16.02.2025 passed on Form GST DRC-07 under Section 73(9) of the UPGST Act, 2017. A show cause notice under Section 73 had been issued on 30.10.2024 (granting one month) along with a DRC-01 notice granting 23 days to reply. The petitioner filed its reply on 22.11.2024, and a hearing date of 29.11.2024 was fixed. No order was passed on that date, no fresh date was communicated, and the assessing authority proceeded to pass the impugned order 84 days later, on 16.02.2025, without any further notice.

Issues Involved

  1. Whether an order passed 84 days after a fixed hearing date, without the authority either deciding on that date or communicating a fresh date, amounts to an unlawful ex parte order.
  2. Whether the availability of an appellate remedy under Section 107 precludes writ interference where a breach of natural justice is demonstrated.

Petitioner's Arguments

  • The impugned order is, in substance, an ex parte order since no fresh date was ever communicated after 29.11.2024.
  • Relied on the coordinate bench decisions in M/S Videocon D2H Limited v. State of U.P. and M/S Aroma Chemicals v. Union of India to contend that such an order cannot stand.

Respondent's Arguments

  • The petitioner has an efficacious appellate remedy under the Act and is itself to blame for not appearing/complying with the notice dated 30.10.2024.

Court Order / Findings

  • Held that once a hearing date is fixed, it is incumbent on the assessing authority either to pass the order on that date or to fix and communicate a further date to the assessee.
  • By not passing the order on 29.11.2024 and not communicating the next date, the assessing authority forced the ex parte character of the order on the petitioner by its own conduct.
  • In the absence of any statutory provision allowing ex parte proceedings in such circumstances, the breach of natural justice pressed by the petitioner was found to be real, especially where the reply had been pending for four months with no date fixed.
  • The Court declined to relegate the petitioner to the alternate appellate remedy given this natural justice breach, and set aside the order dated 16.02.2025, directing that it be treated as the final notice.
  • The petitioner was given two weeks to file its reply with supporting documents, after which the department was to fix a short date with at least one week's notice and pass a reasoned order.

Important Clarification

  • Once a proper officer fixes a date for hearing in Section 73 proceedings, natural justice requires that the officer either decide the matter on that date or fix and communicate a fresh date to the assessee. Silently letting the matter lie and later passing an order months afterward, without any notice of a revised date, is an unlawfully ex parte order — a defect the assessee need not first raise before the appellate authority, since the writ court can directly correct such a fundamental breach.

Sections Involved

  • Section 73(9), UPGST Act, 2017 — passing of the adjudication order after considering reply to show cause notice.
  • Section 50, UPGST Act, 2017 — interest on delayed payment (as read with Section 73(9) in the impugned order).
  • Form GST DRC-01 & DRC-07 — show cause notice and summary of the adjudication order.

Decision – In Favour of

In favour of the Assessee.

Case Details

High Court of Judicature at Allahabad; WRIT TAX No. 4167 of 2025; Coram: Justice Shekhar B. Saraf & Justice Praveen Kumar Giri; Order dated 18.09.2025.

Link to Download the Order

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