Case Title, Court, Petition No., Date
M/s Om Traders v. Deputy Commissioner State Tax and Another
High Court of Judicature at Allahabad
Writ Tax No. 2110 of 2024
Judgment dated: 05.12.2024
Category of Dispute
Input Tax Liability – Opportunity of being heard before demand under Section 73
Relevant Sections
Section 73 of the CGST Act, 2017; Article 226 of the Constitution of India
Facts (Para 2–4)
The petitioner, M/s Om Traders, an LLP engaged in manufacturing and sale of exempt goods, challenged the assessment order dated 07.02.2024 under Section 73 of the CGST Act. The order created tax, interest, and penalty liability ex parte. The petitioner claimed that no show cause notice (DRC-01A) was ever served or visible on the GST portal under “view notices and orders.” The order was discovered only in September 2024 upon portal upload. An appeal before the first appellate authority was dismissed as time-barred, leaving the petitioner without remedy.
Questions in Dispute (Para 4)
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Whether non-service of notice under Section 73 rendered the ex parte tax demand unsustainable?
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Whether denial of appellate remedy due to delayed knowledge of the order violated the petitioner’s rights?
Observations of the Court (Para 5–9)
The Court noted that service of show cause notice is fundamental to natural justice. It relied upon Division Bench rulings in Ola Fleet Technologies Pvt. Ltd. v. State of U.P. (22.07.2024), Shyam Roshan Transport v. State of U.P. (21.10.2024), Atul Agrawal v. State of U.P. (18.10.2024), and M/s Akriti Food Industry LLP v. State of U.P. (03.12.2024). All these decisions held that where notices were not visible on the GST portal, assessees could not be deprived of their right to contest liability. The Court reiterated that no person should be condemned unheard, and issuance of show cause notice under Section 73 was mandatory.
Judgment (Para 10–12)
The Court quashed the assessment order dated 07.02.2024 and directed that it be treated as a valid notice under Section 73. The petitioner was permitted to file objections with supporting documents within eight weeks. The assessing authority was directed to provide a hearing and pass a fresh order within four weeks thereafter. The writ petition was accordingly disposed of.
Table – Cases Referred
| Case | Court & Petition No. | Date | Verdict |
|---|---|---|---|
| Ola Fleet Technologies Pvt. Ltd. v. State of U.P. | Allahabad HC, Writ Tax No. 855/2024 | 22.07.2024 | Ex parte demand unsustainable; order treated as notice; petitioner allowed to reply. |
| Shyam Roshan Transport v. State of U.P. | Allahabad HC, Writ Tax No. 1756/2024 | 21.10.2024 | Followed Ola Fleet; set aside order; fresh opportunity granted. |
| Atul Agrawal v. State of U.P. | Allahabad HC, Writ Tax No. 1585/2024 | 18.10.2024 | Same principle applied; order quashed; reassessment after hearing. |
| M/s Akriti Food Industry LLP v. State of U.P. | Allahabad HC, Writ Tax No. 2070/2024 | 03.12.2024 | Identical order quashed for non-service of notice; remanded for fresh decision. |
Between Fine Lines
This ruling reinforces that GST demand orders cannot be sustained if issued without proper service of show cause notice. Taxpayers must be given a fair opportunity to contest liability, and failure of portal communication cannot prejudice their rights. For trade and industry, it highlights the importance of monitoring GST portal tabs and preserving proof of non-communication when contesting ex parte orders.
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