Ex parte GST demand quashed for lack of specific hearing notice before passing final order

Issue

Whether an adjudication order passed ex parte is legally sustainable when no specific notice for a personal hearing was issued for the date on which the order was actually passed, violating the principles of natural justice.

Facts

Show Cause Notice: The Department issued a Show Cause Notice (SCN) dated 14.11.2024 under Section 73 of the Act.
Scheduled Dates: The SCN fixed 13.12.2024 as the deadline for filing a reply and 20.12.2024 as the date for the personal hearing.
Non-Appearance: The Petitioner did not appear on the scheduled date (20.12.2024) mentioned in the SCN.
Impugned Order: The Adjudicating Authority subsequently passed the demand order on 15.02.2025.
Procedural Lapse: The record revealed that while a hearing was scheduled for December, no notice was issued to the Petitioner regarding a hearing on 15.02.2025, the day the order was actually passed/finalized.
Appellate Order: An appeal filed against this order was dismissed on 29.09.2025. The Petitioner then filed a writ petition challenging both orders.

Decision

Violation of Natural Justice: The High Court held that the absence of a notice for the hearing on 15.02.2025 (the date of the order) vitiated the entire adjudication process.
Order Non Est: Relying on a coordinate bench decision involving identical issues, the Court ruled that the original order was non est (legally non-existent) due to the breach of natural justice.
Quashing of Orders: Consequently, the original demand order dated 15.02.2025 and the consequential appellate order dated 29.09.2025 were quashed.
Remand: The matter was remanded to the Authorities with a direction to grant a fresh opportunity of hearing to the Petitioner and decide the case de novo in accordance with the law.

Key Takeaways

Specific Notice Required: If an order is not passed on the initial hearing date fixed in the SCN, authorities must generally issue a fresh notice or an adjournment notice for the subsequent date when the matter is taken up for final disposal.

Natural Justice Supremacy: An ex parte order passed without ensuring the assessee was informed of the specific date of the proceedings is liable to be quashed under Writ jurisdiction, even if the assessee missed the initial deadline.

HIGH COURT OF ALLAHABAD

Gangotri Engineers

State of U.P.

Shekhar B. Saraf and Prashant Kumar, JJ.

WRIT TAX No.1175 of 2025

NOVEMBER 14, 2025

Ishank Srivastava, Punit Kumar Srivastava, Rakesh Srivastava and Shashank Srivastava for the Petitioner.

ORDER

1. Heard learned counsel for the parties and perused the record.

2. This is a writ petition under Article 226 of the Constitution of India whereby the petitioner has made the following prayer:

“I. Issue a writ, order or direction in nature of “certiorari” thereby quashing the impugned, ex-party uncontested Order U/S 73 of GST Act, 2017 in terms of DRC 07 dated 15.02.2025 for financial year 2020-21 passed by the opposite party no.3 i.e. Commercial Tax Officer, Raibarelly, Sector-1, Lucknow (B), Lucknow I, Uttar Pradesh, by means of which the O.P. No.3 has raised the demand of Rs.28,79,278.85/- including interest and penalty to the petitioner’s firm, which is made in gross violation of the principles of natural justice; No physical/oral hearing in the matter was afforded to petitioner, adverse material has not been confronted to petitioner resulting in a most unfair trial. (Contained as Annexure No.1).

II. And also issue a writ, order or direction in nature of ‘certiorari’ thereby quashing the impugned Appeal Order dated 29.09.2025, in Appeal No.437/25 under Section 107 of the GST Act passed by the opposite party no.4 i.e. Additional Commissioner, Grade 2 (Appeal) State Tax, Judicial Section-3 Lucknow, U.P. by means of which the O.P. No.4 passed the appeal order dated 29.09.2025 whereby the appeal was dismissed as being beyond limitation. (Contained as Annexure No.2).

III. And also issue the order or direction for refunding of amount deposited by the petitioner while preferring the appeal.”

3. From perusal of records, it appears that a show cause notice was issued to the petitioner on November 14, 2024 wherein filing of the reply was given as December 13, 2024 and the date of personal hearing was fixed on December 20, 2024. The petitioner did not appear in terms of the said show cause notice and thereafter an original order under Section 73 was passed on February 15, 2025. It further appears from the record that no further notice was given to the petitioner with regard to the hearing that was to be taken place on February 15, 2025 on which date the impugned order was passed.

4. In view thereof, we are of the view that this matter is covered by the judgment of the Coordinate Bench of this Bench dated February 21,2024 in Shubham Steel Traders v. State of U.P. (All)/Writ Tax No. 199 of 2024.

5. In light of the same, we are of the view that the original order passed under Section 73 of the GST Act, 2017 is in violation of the principle of natural justice and, accordingly non est in law.

6. Accordingly, the order dated February 15,2025 passed under Section 73 of the GST Act, 2017 and the order dated September 29, 2025 passed in Appeal No. 437/25, under Section 107 of the GST Act, are quashed and set aside with direction to the authorities concerned to grant another opportunity of hearing to the petitioner and thereafter pass the order in accordance with law.

7. With the aforesaid directions, the writ petition stands disposed of.