M/S Govind Ballabh Kandpal vs. The Deputy Commissioner State Tax
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The petitioner, M/s Govind Ballabh Kandpal, challenged an order dated 16.12.2023 passed by the Deputy Commissioner, State Tax (Respondent No. 1) under Section 73 of the CGST Act/UKGST Act. This order demanded tax of Rs. 5,75,986.44, along with interest and penalty. The petitioner's grievance stemmed from a show-cause notice issued on 29.09.2023, which granted a reply submission deadline of 28.10.2023 but fixed the personal hearing date for 26.10.2023, prior to the reply deadline. The petitioner also contended that the notice was not physically served but uploaded on the GST portal, and they were unaware of its contents. The respondent-State was represented by the learned Standing Counsel.
Held
The Court held that the procedure adopted by the respondent-State in fixing the date of personal hearing prior to the date fixed for submission of the reply to the show-cause notice was illegal and in breach of the principles of natural justice. The Court relied on the petitioner's submission and the judgment in M/s Modine Thermal Systems Private Limited, which emphasized that the scheme of the Act, particularly Section 75(4) and 75(5), mandates that an opportunity of hearing is granted after the assessee has had a chance to present their case. The Court found that since the personal hearing was scheduled before the reply was due, it was not an effective hearing. Consequently, the assessment order could not be sustained and was quashed. The matter was remitted back to the Adjudicating Officer to proceed from the stage of the show-cause notice, grant the petitioner an opportunity to file their reply, and thereafter fix a fresh date for personal hearing. The Court expressly left undecided the issue of service of the show-cause notice by uploading on the GST portal.
Key Issues
1. Whether the procedure adopted by the respondent-State in fixing the date of personal hearing prior to the date for submission of reply to the show-cause notice is illegal and in breach of principles of natural justice, as contemplated under Section 73 and Section 75(4) and 75(5) of the CGST Act/UKGST Act? Petitioner's Arguments: The petitioner argued that fixing the personal hearing date before the deadline for submitting a reply to the show-cause notice is procedurally illegal and violates the principles of natural justice. They relied on a Coordinate Bench judgment in M/s Modine Thermal Systems Private Limited v. State of Uttarakhand and others, which held that the statutory scheme requires the hearing to be conducted after the assessee has had an opportunity to respond. The petitioner also contended that the show-cause notice was not properly served, as it was only uploaded on the GST portal and they were unaware of it. Revenue's Arguments: The learned counsel for the Revenue could not dispute the petitioner's contention regarding the personal hearing date being fixed prior to the reply submission date, acknowledging that this rendered the personal hearing ineffective and a breach of natural justice.
Sections Cited
Section 73, Rule 142, Section 50(1), Section 73(9), Section 73(11), Section 75(4), Section 75(5)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT : (per Shri Manoj Kumar Gupta, C.J.)
Heard Mr. Tarun Pande, learned counsel for the petitioner and Ms. Puja Banga, learned counsel for the respondents-State.
The petitioner has assailed the order dated 16.12.2023 passed by respondent No. 1 under Section 73, Rule 142, Section 50(1), Section 73(9) read with Section 73(11) of the CGST Act/ UKGST Act, demanding tax of Rs.5,75,986.44/-, along with interest of Rs. 6,04,500/- and penalty of Rs. 57,598/- each, under the provisions of SGST and CGST respectively.
The case of the petitioner is that a show-cause notice was issued to the petitioner on 29.09.2023, whereby 1
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time was granted to the petitioner to submit his reply by 28.10.2023. By the same notice, date of personal hearing was fixed for 26.10.2023, i.e. before the date fixed for submission of reply.
The contention of learned counsel for the petitioner is that the date of personal hearing could not have been fixed before the date fixed for submission of reply. The procedure adopted by the respondents was, therefore, wholly illegal.
The further submission is that the show-cause notice was not served upon the petitioner by any physical mode, but by uploading the same on the GST portal and petitioner could not come to know of the same.
Learned counsel for the petitioner placed reliance on a judgment of Coordinate Bench in Writ Petition (M/B) No. 123 of 2025, M/s Modine Thermal Systems Private Limited v. State of Uttarakhand and others, in support of the submission that the date of personal hearing could not be prior to the date fixed for submission of reply to the show-cause notice. The relevant extract from the said judgment is as follows: “5) A conjunctive reading of Section 73, 74 and 75 makes it apparent that the approach adopted by the Authority is contrary to the scheme of the Act. Sub-Section 4 and 5 of Section 75 of the Act reads as under:- “75.(4) An opportunity of hearing shall be granted where a request is received in writing from the person 2
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chargeable with tax or penalty, or where any adverse decision is contemplated against such person. (5) The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing: Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.” 6) The scheme of the Act enables the assessee to seek for adjournment not in excess of three times and it is pertinent to note that sub-section 5 succeeds sub-section 4, which enables the assessee to seek for a personal hearing. Section 75 relates to the procedural aspect that is required to be followed by the Authorities in the matter of determination of assessment, more particularly, of tax that has escaped assessment. 7) If the statute stipulates a matter to be performed in a particular manner, the same shall be performed in that manner only. Law in this regard is no more res integra and is well-settled by catena of judgments of the Apex Court.”
Learned counsel for the Revenue Ms. Puja Banga is not in a position to dispute that since date for personal hearing was fixed prior to the date of submission of reply, therefore, personal hearing allegedly afforded was not effective and has resulted in breach of principles of natural justice.
Consequently, the order of assessment cannot be sustained and is hereby quashed. The matter is remitted back to the Adjudicating Officer to proceed from the stage of show cause notice and grant opportunity to the petitioner to file his reply and, thereafter, fix a date for personal hearing.
Accordingly, the writ petition stands disposed of. 3
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All pending applications stand disposed of accordingly.
______________________ MANOJ KUMAR GUPTA, C.J.
___________________ SUBHASH UPADHYAY, J.
Dt: 23rd July, 2026 Rahul 4
RAHUL PRAJAPATI DN: c=IN, o=HIGH COURT OF UTTARAKHAND, ou=HIGH COURT OF UTTARAKHAND, 2.5.4.20=aa4fa3bee6691397758b14516ed3e66e 61bf4c848741983ed8c39e4145cf1dab, postalCode=263001, st=UTTARAKHAND, serialNumber=303B55CC3063D34AC45BF8A192 FCAD15C390A1AAD7B39857D2540AE4C28A489 8, cn=RAHUL PRAJAPATI Date: 2026.07.28 17:24:13 +05'30'
Reproduced from the public record of the Uttarakhand High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.