M/S Trust Pharmacy,Lucknow Thru. Authorised Signatory Rajlaxmi Bhandari vs. State Of U.P. Thru. Addl. Chif Secy. Tax And Registration And 2 Others

Facts

The petitioner, M/s Trust Pharmacy, Lucknow, challenged two orders: an order dated December 21, 2023, passed under Section 73 of the GST Act, and an order dated March 24, 2025, which dismissed their appeal as being beyond the limitation period. The petitioner contended that the Section 73 order was passed without providing an adequate opportunity of hearing. The respondent, State of U.P., through the Additional Chief Secretary, Tax and Registration, and two others, stated that the notice sent to the petitioner fixed the hearing date before the deadline for submitting a reply. The petitioner argued that this procedural flaw was identical to an issue previously decided by the High Court in Writ Tax No. 303 of 2024 (Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr.).

Held

The Court held that the order dated December 21, 2023, passed under Section 73 of the GST Act, was in violation of Section 75(4) of the GST Act due to the lack of a proper opportunity of hearing. The Court found that the issue was squarely covered by its previous judgment in Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr. (Writ Tax No. 303 of 2024). The reasoning was that the notice sent to the petitioner had fixed the hearing date prior to the date for submission of the reply, which effectively denied the petitioner a meaningful opportunity to present their case. Consequently, both the order dated December 21, 2023, and the subsequent appellate order dated March 24, 2025, were quashed. The matter was remanded to the assessing authority to pass a fresh order after providing the petitioner with an adequate opportunity of hearing. The ratio decidendi is that an order passed in violation of the principles of natural justice, specifically the right to a fair hearing, is unsustainable in law.

Key Issues

1. Whether the order dated December 21, 2023, passed under Section 73 of the GST Act, is liable to be quashed for being passed without affording a proper opportunity of hearing to the petitioner, in violation of Section 75(4) of the GST Act? Petitioner's Argument: The petitioner argued that the order under Section 73 was passed without giving them an opportunity of hearing. They further contended that the issue of a flawed hearing notice, where the hearing date preceded the reply submission date, was squarely covered by this Court's judgment in Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr. (Writ Tax No. 303 of 2024), decided on March 4, 2024. Respondent's Argument: The learned Standing Counsel, based on instructions, stated that the notice sent to the petitioner fixed the hearing date prior to the date of submission of the reply. The respondent did not present any further arguments or rely on specific provisions or precedents beyond this factual assertion.