Wrong SCN Issued; Allahabad HC Quashes GST Demand

The Allahabad High Court, Lucknow Bench, has set aside a GST assessment order imposing tax, interest and penalty amounting to Rs. 12.35 lakh for the financial year 2019–20, holding that since the show cause notice at the time of initiation itself was wrong, it was the duty of the authorities to once again issue a fresh show cause notice to the petitioner in accordance with law. The bench of Justice Shekhar B. Saraf and Justice Manjive Shukla has observed that the proceedings were conducted in gross violation of the principles of natural justice. The denial of a meaningful opportunity of personal hearing vitiated the entire adjudication process The writ petition was filed by M/s Meena Leather Industries, which had challenged an ex-parte order dated August 21, 2024, passed under Section 73 of the GST Act. The petitioner also sought quashing of the show cause notice dated May 24, 2024, and a restraint on recovery proceedings pursuant to the impugned order The petitioner contended that the very initiation of proceedings was flawed, as the show cause notice did not comply with statutory and procedural requirements. It was argued that the date fixed for submission of reply and the date of personal hearing were the same—June 24, 2024—thereby rendering the opportunity of hearing illusory. According to the petitioner, such a process defeated the fundamental requirement of fair hearing under adjudication proceedings After examining the record, the High Court noted that although replies had been filed by the assessee, the adjudicating authority neither issued a proper notice for personal hearing nor afforded a real opportunity to participate in oral hearing. The Court reiterated that before passing any adverse order, the adjudicating authority must offer a personal hearing unless the noticee expressly waives such right or fails to avail it despite due notice The Bench extensively relied on the principles laid down in Mahaveer Trading Company, where it was held that practices such as fixing the same date for reply and hearing, or mentioning “N.A.” in columns relating to hearing, amount to denial of natural justice. The Court also took note of an official memorandum issued by the Commissioner, Commercial Tax, Uttar Pradesh, directing field formations to strictly adhere to proper hearing procedures, including fixing hearing dates after receipt of replies and passing orders on the date of hearing itself While acknowledging that 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 bar the High Court’s intervention. The Bench observed that the appellate authority under the GST regime lacks the power to remand matters, making writ jurisdiction an appropriate remedy in such circumstances Concluding that the impugned order was unsustainable in law, the High Court quashed and set aside the ex-parte GST demand order dated August 21, 2024. However, it granted liberty to the tax department to issue a fresh show cause notice and proceed in accordance with law, after strictly complying with procedural safeguards and principles of natural justice. With these directions, the writ petition was disposed of Case Details Case Title: M/S Meena Leather Industries Versus State Of U.P. Case No.: WRIT TAX No. - 1639 of 2025 Date: 19/12/2025 Counsel For Petitioner: Raj Kumar Singh, Savitra Vardhan Singh Counsel For Respondent: C.S.C. Click Here To Read Order Read More: Patna High Court Quashes GST Assessment for Illegal Inspection, Cautions Tax Officers

Wrong SCN Issued; Allahabad HC Quashes GST Demand

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