Facts of the Case

M/S A S B System, acting through its authorised signatory, challenged an order dated 24.04.2024 passed under Section 73 of the U.P. Goods and Services Tax Act, 2017, as well as the subsequent appellate order dated 27.09.2025 which dismissed its appeal as time-barred. The assessment record showed that the petitioner had appeared and filed replies to the show-cause notice on three separate occasions, and the adjudicating authority proceeded to decide the matter on merits after the last such reply. However, no separate notice of personal hearing was ever issued, and no opportunity of oral hearing was granted before the adverse order was passed.

Issues Involved

  1. Whether an adjudication order under Section 73 can be sustained where no opportunity of personal hearing was granted to the assessee despite an adverse decision being contemplated.
  2. Whether the appellate rejection on limitation grounds can stand once the underlying assessment order itself is found to be procedurally infirm.

Petitioner's Arguments

  • No date for personal hearing was ever fixed before the Section 73 order was passed, even though an adverse order was clearly contemplated.
  • Relied on the Division Bench ruling in Mahaveer Trading Company v. Deputy Commissioner, State Tax (2024:AHC:38820-DB), which held that denial of personal hearing renders such orders unsustainable.

Respondent's Arguments

  • The Standing Counsel, on instructions, fairly conceded that no date had been fixed for personal hearing in the petitioner's case.
  • Placed on record an Office Memo dated 12.11.2024 issued by the Commissioner, Commercial Tax, U.P., acknowledging systemic lapses across the State in recording personal-hearing dates and directing field formations to align the date of the order with the date of personal hearing.

Court Order / Findings

  • The Court reiterated the binding ratio of Mahaveer Trading Company that an opportunity of personal hearing must precede any adverse adjudication order under Section 73/74, and that a mere change of substantive tax law does not excuse revenue authorities from this procedural mandate under Section 75(4).
  • Held that where a noticee has neither waived the right to personal hearing nor been afforded one, an adjudication order passed thereafter cannot be sustained.
  • Both the assessment order dated 24.04.2024 and the appellate order dated 27.09.2025 were quashed.
  • The matter was remanded to the assessing authority to pass a fresh order after granting the petitioner an opportunity of personal hearing.

Important Clarification

  • Filing a written reply to a show-cause notice, even on multiple occasions, does not substitute for a distinct and specifically notified opportunity of personal hearing under Section 75(4) once an adverse decision is contemplated.
  • The date of the final order must be commensurate with the date of personal hearing, and a personal hearing date preceding or coinciding with the reply deadline is treated as non-est by the Department's own internal instructions.

Sections Involved

  • Section 73, U.P. GST Act, 2017 — determination of tax not paid/short paid for reasons other than fraud.
  • Section 75(4), U.P. GST Act, 2017 — mandatory grant of personal hearing where an adverse decision is contemplated or requested in writing.

Decision – In Favour of

The order is in favour of the Assessee. Both the assessment order and the appellate rejection were quashed, and the matter was remanded for a fresh decision after granting a proper hearing.

Case Details

Court: High Court of Judicature at Allahabad, Lucknow Bench
Case No.: Writ Tax No. 1269 of 2025
Coram: Hon'ble Jaspreet Singh, J.
Date of Order: 7th November, 2025

Link to Download the Order

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