Uttarakhand High Court Sets Aside GST Order Passed Same Day As Reply, Calls Hearing An “Eyewash”

Observing that passing an adjudication order on the very same day as filing of reply without granting a meaningful opportunity of hearing violates principles of natural justice, the High Court of Uttarakhand set aside GST demand and penalty proceedings against Poddar Ispat Pvt. Ltd.

The bench, consisting of Chief Justice Manoj Kumar Gupta and Justice Subhash Upadhyay, stated that the mere recording of a hearing on the date of filing a reply does not satisfy the requirement of a fair opportunity.

The bench stated that "The respondents were, therefore, required to intimate the date of personal hearing in advance, otherwise the alleged hearing was nothing but an eyewash. Mere recital in the order that the petitioner was heard on the day the petitioner filed its reply, would not be compliance of the mandatory requirement of providing an opportunity of hearing inasmuch as the person concerned, on the date fixed for filing of reply, in every likelihood, may not be prepared for advancing the arguments."

The writ petition was filed challenging the order dated 26.12.2025 passed under Section 74(9) of the Uttarakhand GST Act, along with the show cause notices, DRC-01 forms, and consequential recovery proceedings initiated against the petitioner for the alleged wrongful availment of input tax credit amounting to Rs. 8.49 crore for the financial year 2023–24.

The petitioner contended that despite specifically requesting a personal hearing, the adjudicating authority passed the impugned order on the very same day the reply was submitted, without intimating any date for hearing.

It was further argued that the show cause notice itself did not contain necessary ingredients required under Section 74 and that the reply filed by the petitioner was not duly considered.

On the other hand, the Revenue relied upon the recital in the order stating that the opportunity of hearing had been granted and the reply was considered. However, it was not disputed that the order was passed on the same day the reply was filed and that the show cause notice did not indicate that the date of filing the reply would also be treated as the date of personal hearing.

The Court examined the requirement under Section 75(4) of the GST Act, which mandates grant of personal hearing where requested. It held that such opportunity must be real and effective and cannot be reduced to a mere formality.

The Court observed that if the date of hearing is not intimated in advance, the assessee cannot be expected to be prepared to argue the matter on the same day as filing of reply.

Terming the procedure adopted by the department as an “eyewash,” the Court held that mere mention in the order that the petitioner was heard does not amount to compliance with the statutory mandate.

It emphasized that the show cause notice only required submission of reply and did not put the petitioner on notice that personal hearing would be conducted on the same day.

"the show-cause notice only required the petitioner to submit its reply and never put the petitioner to notice that on the same day, hearing would also take place, therefore, we are of the considered opinion that the procedure followed was in violation of the principles of natural justice contained in Section 75(4) of the Act", stated the bench.

Holding that the impugned order was passed in violation of principles of natural justice embodied under Section 75(4), the Court set aside the order dated 26.12.2025 and permitted the department to proceed afresh after granting proper opportunity of hearing.

Accordingly, the matter was remanded back to the adjudicating authority to fix a fresh date of hearing with due notice and pass a reasoned order in accordance with law.

For Petitioner: Advocates Rakesh Prasad Singh, Kanti Ram Sharma and Rahul Ranjan

For Respondent: Puja Banga, learned Standing Counsel