Case Law Details
Poddar Ispat Pvt. Ltd. Vs Office of the Deputy Commissioner & another (Uttarakhand High Court)
The Uttarakhand High Court examined a writ petition challenging a GST demand order dated 26.12.2025 passed under Section 74(9) of the Uttarakhand Goods and Services Tax Act, 2017, along with related show-cause notices and recovery proceedings. The proceedings arose from allegations of inadmissible input tax credit (ITC) amounting to ₹8.49 crore for the financial year 2023–24. The petitioner had been issued multiple notices, including a show-cause notice dated 14.05.2025 and subsequent notices in prescribed forms, culminating in a final order imposing tax and penalty.
The petitioner submitted its reply on 26.12.2025 and specifically requested a personal hearing. However, on the same day, the authority passed the impugned order without notifying any date for hearing or granting an opportunity to present arguments. The petitioner contended that this violated principles of natural justice and that its reply had not been properly considered. It was also argued that the show-cause notice lacked essential ingredients under Section 74.
The Revenue maintained that the reply had been considered and that an opportunity of hearing was provided, but it did not dispute that the order was passed on the same day the reply was filed, and that the notice did not indicate that a hearing would take place on that date.
The Court referred to Section 75(4) of the Act, which mandates granting an opportunity of hearing when requested. It held that authorities must inform the assessee in advance of the date of hearing. Passing an order on the same day as the reply, without prior notice of hearing, was found to be inadequate and amounted to a mere formality. The Court observed that such a process deprived the petitioner of a meaningful opportunity to present its case, as a person may not be prepared to argue on the same day the reply is submitted.
The Court concluded that the procedure followed violated principles of natural justice under Section 75(4). It rejected the Revenue’s reliance on the recital in the order stating that a hearing was provided, holding that such a statement does not substitute for actual compliance with the requirement of prior notice and opportunity.
Accordingly, the impugned order dated 26.12.2025 was set aside. The Court directed the authorities to fix a fresh date for hearing with due prior intimation and thereafter pass a fresh order in accordance with law. All contentions were left open for consideration in the fresh proceedings. The writ petition was disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF UTTARAKHAND HIGH COURT
1. Heard Mr. Rakesh Prasad Singh, learned counsel for the petitioner and Ms. Puja Banga, learned Standing Counsel for the Revenue.
2. The present writ petition has been filed praying for quashing of the order dated 26.12.2025 along with DRC-07 dated 26.12.2025, show-cause notice dated 14.05.2025 along with form DRC-01 dated 01.07.2025 and form DRC-01 dated 08.12.2025, all issued by respondent no.1, the notice for intimation of amount recoverable vide DRC-01D, dated 05.03.2026, and to stay the recovery proceedings initiated in pursuance of the said orders.
3. The petitioner was issued show-cause notice dated 14.05.2025 under Section 74(1) read with Section 122 of the Uttarakhand Goods and Services Tax Act, 2017 (for short hereinafter referred to as “the Act”) in respect of Financial Year 2023-24 proposing imposition of certain amount as tax along with pre-intimation notice in DRC-01A on the same date. It was followed by DRC-01 dated 01.07.2025 along with same show-cause notice dated 14.05.2025 alleging utilization of inadmissible ITC of Rs.8,49,98,096/- and proposing recovery of the said amount. Finally, another show-cause notice was issued on 08.12.2025 along with Form GST DRC-01 dated 01.07.2025.
4. The petitioner-company submitted its reply to the same on 26.12.2025 and, inter alia, prayed for dropping the show-cause notice. The petitioner also prayed for being afforded personal hearing. On the same date, i.e. on 26.12.2025, the impugned order has been passed under Section 74(9) by respondent no.1 imposing tax and penalty and in pursuance thereof, recovery proceedings have also been initiated.
5. The contention of learned counsel for the petitioner is that, although the petitioner requested for personal hearing, but without intimating any date for personal hearing and without affording any personal hearing to the petitioner, the order has been passed. He further submits that the show-cause notice issued to the petitioner is defective, as it does not have any ingredient of Section 74 of the Act. He further submits that the reply of the petitioner has not been considered while passing the impugned order under Section 74 of the Act.
6. Ms. Puja Banga, learned Standing Counsel for the Revenue has invited our attention towards the recital in the order that the reply of the petitioner was duly considered and it was given opportunity of hearing. However, she does not dispute that the order was passed on the same day, the petitioner submitted its reply and the show-cause notice issued to the petitioner on 08.12.2025 does not mention that on the date the petitioner submits its reply, personal hearing would also take place.
7. Under Section 75(4) of the Act, opportunity of hearing is required to be granted to the person concerned, if such a request is made.
8. The respondents were, therefore, required to intimate the date of personal hearing in advance, otherwise the alleged hearing was nothing but an eyewash. Mere recital in the order that the petitioner was heard on the day the petitioner filed its reply, would not be compliance of the mandatory requirement of providing opportunity of hearing inasmuch as the person concerned, on the date fixed for filing of reply, in every likelihood, may not be prepared for advancing the arguments.
9. As already noted above, the show-cause notice only required the petitioner to submit its reply and never put the petitioner to notice that on the same day, hearing would also take place, therefore, we are of the considered opinion that the procedure followed was in violation of the principles of natural justice contained in Section 75(4) of the Act and, accordingly, the impugned order dated 26.12.2025 is, hereby, set-aside, leaving it open to the respondents to fix a fresh date for hearing under due intimation to the petitioner and, thereafter, pass a fresh order strictly in accordance with law. All pleas and contentions are left open for being raised before the proper officer.
10. The writ petition stands disposed of accordingly.
Pending application, if any, also stands disposed of.
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