Facts of the Case

M/s A.U. Enterprises challenged an order dated 29.04.2025 (for FY 2024-25) and a related show-cause notice dated 20.03.2025, and sought unblocking of its electronic credit ledger, which had caused serious hardship in filing returns and carrying on business. The petitioner pointed out that the date fixed for filing its reply was 20 April 2025, while the date fixed for personal hearing was earlier, 27 March 2025 — meaning the hearing was scheduled before the reply was even due.

Issues Involved

  1. Whether an ex-parte order can be sustained where the very initiation — the show-cause notice — fixed the personal hearing date before the reply date, and whether the writ court can intervene despite the petition being filed beyond the appeal limitation period.

Petitioner's Arguments

  • The very initiation and first show-cause notice was improper as the hearing date preceded the reply date, rendering the entire proceeding bad in law.
  • Relied on Mahaveer Trading Company v. Deputy Commissioner, State Tax and the UP Commissioner's Office Memo No. 1406 dated 12.11.2024 flagging this exact defect across the State.

Respondent's Arguments

  • No specific defence is recorded beyond the Court's own examination of the sequencing of dates on the notice.

Court Order / Findings

  • The Court held the principles in Mahaveer Trading Company squarely applicable: since the show-cause notice itself was flawed at the time of initiation, it was incumbent on the authorities to issue a fresh, properly sequenced notice, which was not done.
  • It found this to be a violation of the principles of natural justice, and held that even though the writ petition was filed beyond the limitation period prescribed for filing an appeal, the Court may intervene in exceptional cases involving a natural justice violation.
  • The ex-parte order dated 29.04.2025 was quashed and set aside, with liberty to the department to issue a fresh show-cause notice and proceed in accordance with law.

Important Clarification

  • A hearing-date sequencing defect present in the very first show-cause notice — not merely in a later reminder — is treated as vitiating the proceeding from inception, and courts will exercise writ jurisdiction to intervene on this ground even where the petition is otherwise filed beyond the normal appeal limitation period.

Sections Involved

  • Section 73/74 of the GST Act, 2017 — determination of tax not paid/short paid.
  • Section 75(4) of the CGST Act, 2017 — mandatory opportunity of personal hearing before an adverse order.

Decision – In Favour of

In favour of the Assessee — the ex-parte order was quashed with liberty to the department to issue a fresh, properly sequenced show-cause notice.

Case Details

Court: High Court of Judicature at Allahabad — Case No.: Writ Tax No. 4941 of 2025 — Coram: Hon'ble Justices Shekhar B. Saraf and Praveen Kumar Giri — Date of Order: 25 September 2025.

Link to Download the Order

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