Case Information
-
Case Title: M/s Integra Micro Systems Private Limited v. State of U.P. & Others
-
Court: High Court of Judicature at Allahabad, Lucknow Bench
-
Petition No.: Writ Tax No. 376 of 2024
-
Neutral Citation: 2025:AHC-LKO:2863
-
Date of Judgment: 16.01.2025
-
Relevant Sections: Section 74, Section 75(4), Section 107 of CGST Act, 2017
-
Category of Dispute: Input Tax Credit – Demand under Section 74, Procedural lapse in hearing
Facts (Para 2–5)
The petitioner, a bona fide business entity, inadvertently availed Input Tax Credit (ITC) during FY 2017–18, though it was never utilized. On realizing the error, corrected returns were filed. Despite this, a show-cause notice dated 21.06.2022 under Section 74 of the CGST Act proposed a demand of ₹2,11,02,438/-. The petitioner sought adjournment citing counsel’s illness and specifically requested a personal hearing. Subsequent “reminder notices” dated 03.08.2022 and 02.03.2023 mentioned deadlines for reply but categorically indicated “NA” against the fields for date, time, and venue of hearing. Without granting hearing, an ex parte order dated 25.03.2023 confirmed demand. The appeal under Section 107 was later dismissed on 04.12.2024 as time-barred.
Questions before the Court (Para 6–7)
-
Whether the order confirming demand under Section 74 could be sustained when no personal hearing was afforded in contravention of Section 75(4).
-
Whether the dismissal of the appeal as time-barred could cure the illegality of the original demand order.
Observations (Para 7–9)
The Court noted that both the original SCN and subsequent reminder notices failed to specify any date, time, or venue for hearing. The Standing Counsel admitted that no personal hearing was ever granted. The Court relied on its earlier decision in Party Time Hospitality Prop. Smt. Punita Gupta v. State of U.P. (Writ Tax No. 176 of 2023, decided on 28.08.2023) where compliance with Section 75(4) was held mandatory. The Court reaffirmed that any adverse decision without hearing is contrary to natural justice and statutory mandate.
Judgment (Para 10–13)
The Court held that the order dated 25.03.2023 passed under Section 74 was unsustainable as it violated Section 75(4) and natural justice. Consequently, the appellate order dated 04.12.2024 was also quashed. The matter was remanded to the adjudicating authority to pass a fresh order after affording the petitioner an opportunity to file reply and be heard. The writ petition was allowed.
Case References in Judgment
| Case | Court & Citation | Ratio |
|---|---|---|
| Party Time Hospitality Prop. Smt. Punita Gupta v. State of U.P. & Ors. | Allahabad HC, Writ Tax No.176 of 2023 (28.08.2023) | Compliance with Section 75(4) of CGST Act is mandatory; adverse orders without hearing are void. |
Between Fine Lines
For trade and industry, this judgment reiterates that GST demand orders under Section 74 cannot be sustained if passed without granting a mandatory personal hearing. Even if ITC is wrongly availed, procedural safeguards under Section 75(4) must be strictly followed. Businesses can contest demands issued without opportunity of hearing, regardless of whether an appeal is time-barred.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
 and natural justice.){kind=link}