Kisan Traders Vs State of U.P (Allahabad High Court)
The Allahabad High Court heard a writ petition under Article 226 challenging the imposition of tax, interest, and penalty totaling Rs. 6,75,552 under Section 73(9) of the GST Act, 2017 for the financial year 2018-19. The petitioner sought to quash the impugned order dated 26.04.2024 and the show cause notice dated 22.12.2023, and requested a direction restraining recovery of the disputed amount. The petitioner argued that the initial show cause notice was defective, as it failed to specify the date, time, and place of personal hearing, violating the principles of natural justice.
The petitioner relied on the decision in Mahaveer Trading Company vs. Deputy Commissioner State Tax (2024 U.P.T.C. 734), where the Court emphasized that personal hearings must be afforded before passing any adverse order. In that case, show cause notices lacked proper hearing details, and orders were passed ex-parte without giving the petitioner an opportunity for oral or personal hearing. The judgment clarified that even if a party waives the hearing or fails to attend, this must be formally recorded, and authorities cannot arbitrarily deny the right to a hearing.
In the present case, the High Court observed that the show cause notice listed “N.A.” for the date and time of personal hearing without specifying any details. The Court noted that such a defect renders the notice legally invalid, and any ex-parte order based on it cannot be sustained. The Court emphasized that before any adverse adjudication, the opportunity for a personal hearing must be provided.
