Jagjit Enterprises Private Ltd. Vs State of U.P. (Allahabad High Court)
The present petition was filed by Jagjit Enterprises Private Ltd., challenging two specific orders:
1. The order dated 31.12.2023 passed under Section 73 of the U.P. Goods and Services Tax Act, 2017 (the GST Act).
2. The order dated 23.09.2025 by which the petitioner’s appeal was dismissed as being beyond limitation.
The central contention of the petitioner’s counsel was that no opportunity of personal hearing was granted before the order dated 31.12.2023 was passed under Section 73 of the GST Act. The counsel argued that in the absence of such an opportunity, the impugned order cannot be sustained. This argument was supported by referencing a previous Division Bench judgment of the same court in Writ Tax No.303 of 2024 [Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr; 2024:AHC:38820-DB].
The Learned Standing Counsel for the State conceded, based on instructions, that “no date was fixed for personal hearing” regarding the issue of opportunity of hearing.
The High Court then noticed and relied upon the observations made by its Division Bench in the Mahaveer Trading Company case. Key points from that judgment, which deal with the mandatory nature of personal hearing, include:
- It is basic to procedural law under taxing statutes that an opportunity of personal hearing must be provided to an assessee before any assessment or adjudication order is passed against them.
- The Division Bench found it “strange and wholly unacceptable” that revenue authorities were failing to observe this mandatory procedural requirement simply because the substantive law had changed, thereby denying the opportunity of hearing.
- Section 75(4) of the Act mandates: “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.”
- In the Mahaveer Trading Company case, the record showed the petitioner appeared on three dates, filed replies, and the adjudicating authority subsequently passed a merit order without issuing any further notice or granting an opportunity of personal hearing.
- The Additional Chief Standing Counsel in that case had fairly submitted that due to similar occurrences noticed in other litigation, the Commissioner, Commercial Tax, Uttar Pradesh, had issued Office Memo No. 1406 dated 12.11.2024 to all field formations for necessary compliance.
This Office Memo highlighted practices that needed to be discontinued, including:
1. Mentioning only “N.A.” (Not Applicable) without mentioning the date or time of personal hearing.
2. Fixing the date of personal hearing prior to or on the same date as the reply to the Show Cause Notice, which was termed non-est (non-existent/void). The date of the reply must be definitely prior to the date of the personal hearing.
3. Passing the final order (u/s 73(9)/74(9) etc.) on a date that is not commensurate to the date of personal hearing. The memo stressed that the date of the order “has to be passed on the date of personal hearing.”
The Mahaveer Trading Company judgment concluded that personal hearing must be offered to the noticee before any adverse order is passed in an adjudication proceeding. Exceptions exist only if the noticee chooses to waive that right or fails to avail the opportunity after it is granted.
Based on the finding that this dictum is applicable to the current facts and circumstances, the Allahabad High Court held that the impugned orders cannot be sustained.
Accordingly, the Court allowed the petition, quashing both the order dated 31.12.2023 and the appeal dismissal order dated 23.09.2025. The matter was remanded to the assessing authority to pass a fresh order after giving an opportunity of hearing to the petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard learned counsel for the petitioner and learned Standing Counsel for the State.
2. Present petition has been filed challenging the order dated 31.12.2023 passed under Section 73 of the U.P. Goods and Services Tax Act, 2017 (for short, ‘the GST Act’) as well as the order dated 23.09.2025 whereby the appeal was dismissed as being beyond limitation.
3. Contention of learned counsel for the petitioner is that no opportunity of hearing was granted while passing the order under Section 73 of the GST Act. It has also pointed out that in absence of any opportunity the order impugned cannot be sustained and this issue was dealt by the Division Bench of this Court passed in Writ Tax No.303 of 2024 [Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr; 2024:AHC:38820-DB].
4. Learned Standing Counsel, on the basis of the instructions, states that in so far as the issue of opportunity of hearing is concerned, no date was fixed for personal hearing.
5. Before adverting to the aforesaid submissions it will be appropriate to notice the observations made by the Division Bench of this Court in Mahaveer Trading Company (supra) wherein in paras-5 to 11 it was held that under:
“5. It is basic to procedural law under taxing statutes that opportunity of personal hearing must be provided to an assessee before any assessment/adjudication order is passed against him. Thus, we find it strange and wholly unacceptable merely because the substantive law has changed, the revenue authorities have changed their approach and are failing to observe that mandatory requirement of procedural law. They have thus denied opportunity of hearing to the assessee.
6. Section 75(4) of the Act reads as below:
“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.”
7. Perusal of the impugned order reveals, the petitioner appeared before the competent authority on three dates. With respect to those dates, the impugned order reads as below:
8. Thus, it is established on record that on all three dates, the petitioner had been called to file its reply on the points specified in the respective show-cause notice issued. The petitioner submitted its reply on each occasion. Those replies have been extracted in the impugned order. After recording the reply submitted on 27.10.2022, the adjudicating authority has chosen to deal with the merits of the replies submitted and passed a merit order.
9. It transpires from the record, neither the adjudicating authority issued any further notice to the petitioner to show cause or to participate in the oral hearing, nor he granted any opportunity of personal hearing to the petitioner.
10. On query made, the learned Additional Chief Standing Counsel fairly submits, in light of similar occurrences, noticed in other litigation, he had apprised the Commissioner, Commercial Tax. In turn, the Commissioner, Commercial Tax, Uttar Pradesh, has issued Office Memo No. 1406 dated 12.11.2024. The same has been addressed to all Additional Commissioner to be communicated to all field formations for necessary compliance. A copy of the same has been made available to this Court. It reads as below:
“1. The column in which date of personal hearing has to be mentioned, only N.A. is mentioned without mentioning any date.
2. The column in which time of personal hearing has to be mentioned, only N.A. is mentioned without mentioning time of hearing.
3. In some cases, the date of personal hearing is prior to which reply to the Show Cause Notice has to be submitted this is non-est and this practice has to be discontinued. The date of reply to the Show Cause Notice has to be definitely prior to the date of personal hearing.
4. In some cases, the date of personal hearing is on the same date to which reply to the Show Cause Notice has to be submitted-this is non-est and this practice has to be discontinued. The date of reply to the Show Cause Notice has to be definitely prior to the date of personal hearing.
5. In all cases observed, the date of passing order either u/s 73(9)/74(9) etc. of the Act is not commensurate to the date of personal hearing. It is trite law that the date of the order has to be passed on the date of personal hearing. For eg., the date of furnishing reply to SCN is 15.11.2023 and date of personal hearing is 17.11.2023, then the date of order has to be 17.11.2023″
11. In view of the facts noted above, before any adverse order passed in an adjudication proceeding, personal hearing must be offered to the noticee. If the noticee chooses to waive that right, occasion may arise with the adjudicating authority, (in those facts), to proceed to deal with the case on merits, ex-parte. Also, another situation may exist where even after grant of such opportunity of personal hearing, the noticee fails to avail the same. Leaving such situations apart, we cannot allow a practice to arise or exist where opportunity of personal hearing may be denied to a person facing adjudication proceedings. “
6. Since the aforesaid dictum is applicable in the present facts and circumstances, accordingly, the impugned orders cannot be sustained and the orders dated 31.12.2023 & 23.09.2025 are accordingly quashed.
7. With the aforesaid, the present petition is allowed.
8. Matter is remanded to the assessing authority to pass fresh order after giving an opportunity of hearing to the petitioner.
