Violation of Natural Justice: Fixing Date of Personal Hearing on the Same Day as Deadline for Reply is Impermissible; Order Remanded

ISSUE

Whether the Adjudicating Authority can fix the date and time of personal hearing on the exact same date and time stipulated for submitting the reply to the Show Cause Notice (SCN).
Whether an Appellate Order dismissing an appeal without recording any reasons is sustainable in law.

FACTS

The Notice: A Show Cause Notice (SCN) was issued to the assessee under Section 73 for the period 2017 after a scrutiny of returns.
The Procedural Flaw: The SCN fixed the deadline for submitting the reply and the schedule for the personal hearing on the same date and time.
The Defence: The assessee submitted a reply, but pointed out that this simultaneous scheduling violated the principles of natural justice and the Circular/Guidelines issued by the Commissioner of Commercial Tax (which state that the date of reply submission and personal hearing cannot be the same).
The Order: The authority ignored this and passed an ex-parte order confirming the demand without affording a real opportunity of hearing.
The Appeal: The Appellate Authority dismissed the assessee’s appeal without recording any specific reasons for the dismissal.

HELD

Violation of Guidelines: The High Court noted that the Commissioner’s guidelines explicitly forbid fixing the hearing date on the same day as the reply deadline. The reply must be considered before the hearing takes place.
Denial of Opportunity: Fixing simultaneous dates effectively denies the assessee a reasonable opportunity to be heard, rendering the process an empty formality.
Unreasoned Appellate Order: The Court criticized the Appellate Authority for passing a non-speaking order. Judicial and quasi-judicial orders must contain reasons.
Verdict: Both the impugned adjudication order and the appellate order were quashed. The matter was remanded back to the Adjudicating Authority for fresh decision after affording a proper opportunity of hearing. [In Favour of Assessee]

KEY TAKEAWAYS

Distinct Stages: The adjudication process has a logical sequence: SCN $\rightarrow$ Reply $\rightarrow$ Consideration of Reply $\rightarrow$ Personal Hearing $\rightarrow$ Order. Collapsing the “Reply” and “Hearing” stages into one moment is a procedural illegality.
Speaking Orders: An Appellate Authority cannot simply say “Appeal Dismissed.” They must discuss the grounds of appeal and explain why they are rejecting them. A “non-speaking order” is liable to be quashed by the High Court.
Check Your Notices: If you receive a DRC-01 where the “Date of Personal Hearing” matches the “Reply By” date, you should immediately object to it in writing, citing this violation of natural justice.

HIGH COURT OF ALLAHABAD

Prayagraj Power Generation Company Ltd.

Joint Commissioner (Corporate Circle) State Tax^*

Piyush Agrawal, J.

WRIT TAX No. 70 of 2025

DECEMBER 1, 2025

Suyash Agarwal for the Petitioner.

ORDER

1. Heard Shri Suyash Agarwal, learned counsel for the petitioner and learned ACSC for the State – respondents.

2. The instant writ petition has been filed against the impugned order dated 30.09.2024 passed by the respondent no. 2 as well as the impugned order dated 29.12.2023 passed by the respondent no. 1.

3. Learned counsel for the petitioner submits that petitioner is engaged in the business of generation of electricity and supply of power as well as sale of fly ash. He further submits that on 11.04.2023, the respondent no. 1 issued a notice directing the petitioner to file reply on 13 points discrepancies detected during the scrutiny of returns. Thereafter, the respondent no. 1 issued notice dated 17.09.2023 under section 73 of the GST Act for the financial year 2017-18 proposing imposition of tax, penalty and interest, to which the petitioner submitted its reply on 22.11.2023. Thereafter, vide the ex parte impugned order dated 29.12.2023, the tax, penalty and interest was confirmed. Aggrieved by the said order, the petitioner preferred an appeal, which has been dismissed vide impugned order dated 30.09.2024.

4. Learned counsel for the petitioner further submits that in the show cause notice under section 73 of the GST Act, the date & time of personal hearing was fixed on 17.10.2023; whereas, the time to furnish reply was also upto 17.10.2023. He further submits that no separate date was fixed for hearing and therefore, the fixation of personal hearing before expiry of time to file reply is in clear violation of the principles of natural justice. He further submits that the impugned order has been passed without affording an opportunity of hearing to the petitioner. He further submits that the appellate authority has neither considered the grounds of appeal, nor considered the written submission filed by the petitioner while dismissing the appeal. In support of his submissions, he has placed reliance on the judgement of the Apex Court in Asstt. Commissioner, Commercial Tax Department, Works Contract & Leasing v. Shukla & Brothers VST 114 (SC).

5. Per contra, learned ACSC supports the impugned orders.

6. After hearing learned counsel for the parties, the Court has perused the record.

7. The record shows that the notice was issued for the month of July, 2017 to March, 2018, to which reply was submitted. The record further shows that on 11.04.2023, the notice in ASMT – 10 under Rule 99 of the CGST Rules was issued directing the petitioner to file reply on or before 26.04.2023 on the discrepancies detected during the scrutiny of returns. No compliance was made to the said notice. The respondent no. 1, on 17.09.2023, issued notice under section 73 of the GST Act proposing to impose tax of Rs. 20,71,67,168/-, along with interest under section 50 of the GST Act as well as penalty of Rs. 2,07,16,715/-, in which date was fixed for submission of reply by 10.10.2023 and the date of personal hearing was fixed for the same date and thereafter, on 02.11.2023, a reminder was sent granting time to file reply and attend the personal hearing on or before 09.11.2023. The petitioner submitted reply seeking further time for addressing the issues raised in the show cause notice, but without issuing any further notice of fixing the date, an ex parte order was passed on 29.12.2023 conforming the demand of tax, interest and penalty, against which the petitioner preferred an appeal.

8. The record further shows that in the show cause notice under section 73 of the GST Act as well as the reminder, the date for submission of reply and personal hearing was fixed on the same date. The Commissioner of Commercial Tax issued an Office Memo No. 1406 dated 12.01.2024 clearly stating therein the date of submission of reply and personal hearing cannot be on the same date. This Court in Bharat Mint and Allied Chemicals v. Commissioner of Commercial-tax GST 61/59 GSTL 394 (Allahabad), B.L. Pahariya Medical Store v. State of U.P. GST 653/77 GSTL 193 (Allahabad), MSQ Steel (P.) Ltd. v. Dy. CIT [Writ Tax No. 1687/2024, dated 15.10.2024] and Aman Traders v. Deputy Commissioner [Writ Tax No. 349/2024, dated 12.03.2024] has held that a person/assessee is not required to request for opportunity of personal hearing and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order. Reference may be had to the judgements of the Apex Court in Nelson Motis v. UOI (SC)/(1992) 4 SCC 711] and State Bank of India v. Rajesh Agarwal (SC)/(2023) 6 SCC 1.

9. Further, the first appellate court, without recording its own reason, has dismissed the appeal. The Apex Court in Shukla & Brothers (supra) has specifically held that absence of reason assigned, violates the principles of natural justice.

10. In view of the aforesaid facts & circumstances of the case, the impugned orders cannot be sustained in the eyes of law. The matter requires reconsideration.

11. For the said purpose, the impugned orders are hereby quashed.

12. The matter is remanded back to the Joint Commissioner, State Tax, Gautam Buddha Nagar, i.e., the respondent no. 1, for deciding the issue afresh in accordance with law after granting due opportunity of hearing to all the stake holders.

13. The writ petition is, accordingly, allowed.