Sun Glass Works Private Limited Vs State of U.P. And 2 Others (Allahabad High Court)
The Hon’ble Allahabad High Court in M/s Sun Glass Works Pvt. Ltd. v. State of U.P. and Others [Writ Tax No. 2285 of 2025 dated May 29, 2025] held that an order passed without providing a copy of the survey report or affording opportunity of hearing, and without notifying the date of pronouncement, is unsustainable in law and liable to be set aside.
Facts:
M/s Sun Glass Works Pvt. Ltd. (“the Petitioner”) is a private limited company engaged in the manufacture and sale of glass bottles. During June 2021, the Petitioner purchased various chemicals from registered dealers against valid tax invoices for use in its manufacturing process.
The State of Uttar Pradesh (“the Respondent”) issued a show cause notice dated February 17, 2022 under Section 74(1) of the CGST Act alleging that input tax credit had been availed by fraud or misstatement. In response, the Petitioner submitted a detailed reply along with supporting documents including tax invoices, bank statements, and Form GSTR-2A.
Despite the above, the Respondent passed an order dated May 10, 2022 demanding tax and penalty without furnishing a copy of the alleged survey report or granting an opportunity of hearing. Aggrieved, the Petitioner filed an appeal, which was dismissed by the Appellate Authority through the impugned order dated September 25, 2024.
The Petitioner contended that the judgment was reserved on September 18, 2024 without any notice of the pronouncement date, and was later delivered on September 25, 2024. It was submitted that there is no provision under the GST Act permitting such reservation and delayed pronouncement of orders without due notice. The Petitioner relied upon the decision in M/s Wonder Enterprises v. Additional Commissioner, Grade-2 & Another [Writ Tax No. 1150/2024, decided on September 12, 2024].
Issue:
Whether the appellate order passed without sharing the survey report and without notifying the petitioner about the date of pronouncement after reserving judgment valid ?
Held:
The Hon’ble Allahabad High Court in Writ Tax No. 2285 of 2025 held as under:
- Observed that, the impugned order dated September 25, 2024 was passed without furnishing the Petitioner a copy of the survey report or affording opportunity of hearing, which violated the principles of natural justice.
- Noted that, the date originally fixed for hearing was September 18, 2024, when the matter was reserved for judgment. However, the judgment was later delivered on September 25, 2024 without issuing any notice to the Petitioner regarding the new date.
- Further noted that, the personal affidavit filed by the appellate authority failed to disclose any provision or notification permitting such a course of action under the CGST Act.
- Held that, the issue is squarely covered by M/s Wonder Enterprises (supra) and the impugned appellate order could not be sustained in law.
- Accordingly, the writ petition was allowed, the appellate order dated September 25, 2024 was quashed, and the matter was remanded to the appellate authority for fresh adjudication after granting due opportunity of hearing to all stakeholders, preferably within three months.
Our Comments:
This decision reinforces the mandatory requirement of following due process and natural justice before passing orders under the GST law. Section 75(4) of the CGST Act, 2017 provides that an opportunity of hearing must be granted wherever adverse decision is contemplated. Additionally, Section 75(1) mandates adherence to principles of natural justice in adjudication proceedings under Section 74.
The High Court’s reliance on the earlier precedent in M/s Wonder Enterprises reiterates that any deviation from fair procedure — including failure to furnish adverse materials (like survey reports) or passing orders without notice post-reservation — renders the order legally unsustainable.
This judgment underscores the importance of procedural rigour, especially when a taxpayer’s substantive rights (like ITC entitlement) are being curtailed. In the GST context, courts continue to insist on robust adherence to statutory safeguards and fair hearing norms before imposing tax demands.
Relevant Provision:
Section 75 – General provisions relating to determination of tax
“(3) Where any order is required to be issued in pursuance of the direction of the Appellate Authority or Appellate Tribunal or a court, such order shall be issued within two years from the date of communication of the said direction.
(4) An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.”
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
Heard Shri Vishwjit, learned counsel for the petitioner and learned ACSC for the State – respondents.
The instant writ petition has been filed against the impugned order dated 25.09.2024 passed by the Additional Commissioner, Grade – 2 (Appeals), Mainpuri as well as the impugned order dated 10.05.2022 passed by the respondent no. 3.
Learned counsel for the petitioner submits that the petitioner is a Private Limited Company and carrying on the business of manufacturing and sales of glass bottles. He further submits that during the month of June, 2021, the petitioner purchased different types of chemicals (raw material) for manufacture of glass bottles from the registered dealers, who issued tax invoices. On 17.02.2022, a show cause notice was issued under section 74(1) of the GST Act on the ground that ITC has been availed by fraud or mis-statement, to which the petitioner submitted detailed reply along with the copies of tax invoice, bank statement, Form GSTR 2-A, etc. He further submits that the respondent no. 3, vide order dated 10.05.2022, demanded the tax and penalty, without providing a copy of the alleged survey report or opportunity of hearing to the petitioner. Aggrieved by the order dated 10.05.2022, the petitioner preferred appeal, which has been dismissed vide impugned order dated 25.09.2024.
Learned counsel for the petitioner further submits that in appeal, 18.09.2024 was the date fixed, on which date the judgement was reserved and thereafter, it was delivered on 25.09.2024, to which the petitioner was not put to notice. He further submits that there is no provision in the GST Act for reserving the judgement and delivering the judgement later on. In support of his submission, he has placed reliance on the judgement of this Court in M/s Wonder Enterprises Vs. Additional Commissioner, Grade – 2 & Another [Writ Tax No. 1150/2024, decided on 12.09.2024].
Per contra, learned ACSC supports the impugned orders.
After hearing learned counsel for the parties, the Court has perused the record.
In the personal affidavit filed by Additional Commissioner, Grade – 2 (Appeals), Mainpuri, pursuant to the order of this Court, there is no mention of any provision or notification empowering the authority not passing the judgement on the date fixed, but on a later date, to which neither any notice was issued nor the petitioner was heard on the next date.
The issue in hand is squarely covered by the judgement of this Court in M/s Wonder Enterprises (supra).
In view of the peculiar facts & circumstances of the case as noted above, the impugned order dated 25.09.2024 passed by the Additional Commissioner, Grade – 2 (Appeals), Mainpuri cannot be sustained in the eyes of law. The matters require reconsideration.
For the said purpose, the impugned order dated 25.09.2024 passed by the Additional Commissioner, Grade – 2 (Appeals), Mainpuri is hereby quashed.
The writ petition is, accordingly, allowed.
The matter is remanded back to the Additional Commissioner, Grade – 2 (Appeals), Mainpuri, i.e., the respondent no. 2, for deciding the issue de novo after granting due opportunity of hearing to all the stake holders, expeditiously, preferably, within a period of three months from the date of production of a certified copy of this order.
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