M/s Victoria Hardware and Paints vs. State of Uttar Pradesh
& Others (Allahabad High Court)
(Ex-Parte
Order Under Section 73 Liable to Be Quashed for Denial of Personal Hearing and
Violation of Natural Justice)
Introduction
The Allahabad High Court,
Lucknow Bench, in its judgment dated 16 December 2025, reiterated the
fundamental principle that adjudication proceedings under the GST law cannot be
concluded without granting a meaningful opportunity of personal hearing. In M/s
Victoria Hardware and Paints vs. State of U.P. & Others, the Court
quashed an ex-parte order passed under Section 73 of the CGST/SGST Act on the
ground that the very initiation of proceedings was defective and the principles
of natural justice were grossly violated. The ruling reinforces that procedural
fairness is not a mere formality but a mandatory requirement in GST
adjudication.
Case
Details
The writ petition was
filed as Writ Tax No. 1607 of 2025 before the High Court of Judicature
at Allahabad, Lucknow Bench. The petitioner was M/s Victoria Hardware and
Paints, a proprietorship concern represented through its proprietor. The
respondents were the State of Uttar Pradesh, the Assistant Commissioner,
State Tax, Sector-08, Lucknow, and the Deputy Commissioner, State Tax,
Sector-3, Lakhimpur Kheri. The matter was heard and decided by Hon’ble
Justice Shekhar B. Saraf and Hon’ble Justice Manjive Shukla.
Facts of
the Case
The petitioner was issued
a show cause notice under Section 73 of the CGST/SGST Act, pursuant to which an
ex-parte adjudication order dated 10 February 2025 was passed raising tax
demand. Subsequently, recovery proceedings were initiated through issuance of Form
DRC-13 dated 21 June 2025. Aggrieved by the assessment order as well as the
recovery notice, the petitioner approached the High Court under Article 226 of
the Constitution seeking quashing of both orders.
The petitioner contended
that the show cause notice itself was procedurally defective. It was pointed
out that in the reminder notice, the date fixed for submission of reply and the
date fixed for personal hearing were the same, i.e., 7 February 2025. According
to the petitioner, such a notice does not provide a real or effective
opportunity of hearing and renders the entire proceedings void.
Submissions
of the Petitioner
The petitioner relied
heavily on a coordinate Bench judgment of the Allahabad High Court in Mahaveer
Trading Company vs. Deputy Commissioner, State Tax, reported in 2024
U.P.T.C. (117) 734. It was argued that the High Court has consistently held
that before passing any adverse order in adjudication proceedings, the
authority must grant an opportunity of personal hearing. Denial of such
opportunity amounts to violation of the principles of natural justice.
The petitioner further
submitted that since the initial show cause notice itself was flawed, it was
incumbent upon the department to issue a fresh notice in accordance with law.
Proceeding further on the basis of an invalid notice and passing an ex-parte
order was illegal and unsustainable.
Stand of
the Revenue
The State opposed the
writ petition and raised the issue of availability of alternative remedy by way
of appeal. However, during the course of arguments, reliance was placed on
departmental instructions issued by the Commissioner, Commercial Tax, Uttar Pradesh,
which acknowledged recurring procedural lapses by field formations in fixing
dates of reply and personal hearing. These instructions cautioned officers
against fixing the same date for reply and hearing and emphasised the mandatory
requirement of granting a proper opportunity of personal hearing.
Findings of
the Court
The High Court examined
the judgment in Mahaveer Trading Company and found that the principles
laid down therein squarely applied to the facts of the present case. The Court
observed that fixing the same date for filing reply and for personal hearing is
a non-est procedure and defeats the very purpose of providing an opportunity to
the assessee.
The Court further held
that when the initiation of proceedings itself is procedurally defective, the
adjudicating authority is duty-bound to issue a fresh show cause notice in
accordance with law. Failure to do so results in violation of the principles of
natural justice.
Intervention
Despite Availability of Alternate Remedy
Although the writ
petition was filed beyond the statutory period prescribed for filing an appeal,
the Court held that in exceptional cases involving violation of natural
justice, the existence of an alternative remedy does not operate as a bar to
the exercise of writ jurisdiction. The Court observed that compelling the
petitioner to pursue an appeal in such circumstances would be
counter-productive, especially when the appellate authority does not have the
power to remand the matter.
Final
Decision of the Court
The Allahabad High Court
quashed and set aside the ex-parte adjudication order dated 10 February 2025
passed under Section 73 of the CGST/SGST Act. Consequently, the recovery
proceedings initiated through Form DRC-13 were also rendered unsustainable. The
Court granted liberty to the department to issue a fresh show cause notice
and proceed afresh in accordance with law, after following due process.
The writ petition was
disposed of with the above directions.
Conclusion
This judgment is another
strong reaffirmation that GST adjudication cannot be reduced to a mechanical
exercise. Proper issuance of show cause notice and meaningful opportunity of
personal hearing are indispensable requirements under the law. The ruling makes
it clear that procedural shortcuts, such as fixing the same date for reply and
hearing or passing ex-parte orders without due opportunity, will not withstand
judicial scrutiny. For taxpayers, the decision provides important protection
against arbitrary adjudication, and for the department, it serves as a reminder
to strictly adhere to principles of natural justice in GST proceedings.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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