In a recent decision, the Allahabad High Court addressed a case involving M/s Uday Glass House and the State of Uttar Pradesh concerning a GST demand order. The petitioner had been issued a show cause notice in November 2024, with a personal hearing scheduled for January 2025. Although the petitioner submitted a reply in December 2024, they did not attend the hearing, and the adjudicating authority failed to issue a new notice or order on the hearing date. Instead, a final demand order was issued in February 2025 without further communication.
The petitioner argued that the order violated principles of natural justice, as their reply was not considered, and they were not given a fresh hearing date. The Revenue countered by highlighting the petitioner's negligence in failing to appear and their delay in filing the writ petition. The core issue was whether the lack of a new hearing date constituted a violation of natural justice and whether the delay should affect the petitioner's entitlement to relief.
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The Court ruled that personal hearings must be granted when demanded, and any adverse order should address objections raised in replies. The adjudicating authority's failure to issue a new notice and consider the reply was deemed erroneous. However, the Court noted the petitioner's delay in seeking judicial intervention. To ensure fairness, the Court set aside the demand order, requiring the petitioner to deposit 10% of the disputed tax as a condition for a fresh hearing. The case will be reassigned to a different officer, with a deadline for completion set for January 2026, and the petitioner was warned against unnecessary delays.
Order Date: 6 October 2025
Parties: M/s Uday Glass House v. State of Uttar Pradesh and Another
Facts:
- The petitioner was issued a show cause notice (SCN) dated 28.11.2024 under Section 73 of the U.P. GST Act, fixing 06.01.2025 as the date for personal hearing.
- Though the petitioner filed a reply on 17.12.2024, no appearance was made on the hearing date. The adjudicating authority did not pass any order on 06.01.2025, nor did it issue any subsequent notice. However, on 27.02.2025, it passed the final demand order of ₹81,17,596.69 without further intimation.
- The petitioner filed a writ petition after six months, contending violation of natural justice and non-consideration of its reply. The Revenue argued that the petitioner was negligent, failed to appear, and approached the Court belatedly.
Issue:
- Whether a GST demand order passed without fixing a fresh date of hearing after the scheduled date amounts to violation of natural justice, and whether the delay in filing the writ petition should disentitle the petitioner from relief?
Order:
- The Court reaffirmed that personal hearing demanded by a noticee must be granted and that an adverse order with civil consequences must record reasons addressing the objections in the reply.
- The adjudicating authority erred by not issuing a new notice after the lapse of the scheduled date and by not dealing with the petitioners reply in the final order. However, the Court observed that the petitioner also exhibited laches by not appearing on 06.01.2025 and approaching the Court after an inordinate delay.
- To balance equity and procedural fairness, the Court set aside the order conditionally, directing the petitioner to deposit ₹8,17,000 (10% of the disputed tax) within one month. Upon deposit, the matter will be remanded for fresh adjudication by an officer other than the one who passed the impugned order, to be completed by 31 January 2026. The petitioner was cautioned against seeking unnecessary adjournments.
