Order Passed Without Proper Notice – Matter Remanded for Fresh Hearing

Order Passed Without Proper Notice – Matter Remanded for Fresh Hearing

Case Title: M/S Vedika Guest House vs. State of U.P. & Others
Court: High Court of Judicature at Allahabad
Petition No.: Writ Tax No. 1829 of 2025
Judgment Date: 01.05.2025
Relevant Sections: Section 74, Section 75 of the CGST Act, 2017; Article 226 of the Constitution
Category: Principles of Natural Justice – GST Demand Order

Facts of the Case

(Para 2–5)

1. The petitioner, a partnership firm running a guest house, was subjected to a tax, interest, and penalty demand by the Assessing Officer under Section 74 of the CGST Act.

2. The petitioner alleged that the GST DRC-01 show cause notice was never served physically or available in the “view notices and orders” tab of the GST portal, leading to an ex parte order dated 15.04.2021.

3. The petitioner claimed no email communication of the order and became aware only in February 2024, after which an appeal was filed.

4. The first appellate authority rejected the appeal as time-barred without considering that the delay was due to lack of knowledge.

Questions in Consideration

(Para 4, 6, 9)

1. Whether non-service or non-availability of the show cause notice on the GST portal amounts to denial of natural justice?

2. Whether the rejection of appeal as time-barred, despite the petitioner’s lack of knowledge, renders the petitioner remediless?

Observations of the Court

(Para 6–12)

1. Relied on 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) – holding that parties must be given a fair chance to defend, even in ex parte GST orders.

2. Noted that in Sai Dham Residency (28.08.2024), this Court ruled that even if no written reply is filed, Section 75 mandates an opportunity for oral hearing.

3. Cited Commissioner of Customs (Import) v. Dilip Kumar & Co. (2018) 9 SCC 1 – taxation statutes must be interpreted strictly and cannot burden citizens without authority of law.

4. Held that denying the petitioner the opportunity to defend due to non-service of notice violates principles of natural justice.

Judgment of the Court

(Para 13–15)

1. The order dated 15.04.2021 shall be treated as a notice under Section 74 CGST Act.

2. The petitioner is allowed eight weeks to file objections/documents, followed by an oral hearing.

3. The Assessing Officer must pass a fresh order within four weeks thereafter.

4. Petition disposed with directions – no costs awarded.

Between Fine Lines

• No GST demand can be sustained without giving the assessee a fair opportunity to respond.

• Mere portal uploads without proper notice service can violate natural justice.

• Even if a reply is not filed, the right to oral hearing persists under Section 75 CGST Act.

• Tax authorities must strictly comply with statutory procedural safeguards.

• The Court has remanded the case for fresh consideration after giving the petitioner a full hearing.

Summary of Referred Cases