M/S Barnala Steel Industries Private Limited vs. State Of Uttar Pradesh And 2 Others

Held

The Court held that while the petitioner raised issues of lack of jurisdiction in the show cause notice, these grounds could be pressed before the appellate authority. The Court was not inclined to entertain the writ petition on the jurisdictional issue, especially in view of the order it proposed to pass. However, the Court found that a reasonable opportunity of hearing had been denied to the petitioner. The initial notice dated 02.01.2025 indicated a reply date of 02.02.2025 and a personal hearing on 04.02.2025. The proceedings did not conclude on 04.02.2025, and the revenue admitted that proceedings remained pending for seven months thereafter. No further notice was issued to the petitioner, and no date was fixed for hearing during this period. The impugned order was passed on ex-parte consideration of the petitioner's reply. Therefore, the impugned order could not be sustained and was set aside. The writ petition was allowed with a direction to the Adjudicating Authority to pass a fresh order in accordance with law, also dealing with the petitioner's objection on the issue of lack of jurisdiction under Section 74 of the Act.

Facts

The petitioner, M/S Barnala Steel Industries Private Limited, challenged an adjudication order dated 03.09.2025, which arose from a show cause notice dated 02.01.2025 issued under Section 74 of the UPGST Act, 2017, for the financial year 2023-24. The petitioner argued that the show cause notice was void and without jurisdiction, and alternatively, that the adjudication order was passed without affording a reasonable opportunity of hearing. The revenue contended that the petitioner had a statutory remedy of appeal and that all issues could be raised in that proceeding. The petitioner had filed a reply to the show cause notice on 29.03.2025, stating that supporting documents would be produced at the personal hearing. The adjudication order was passed on 03.09.2025.

Key Issues

1. Whether the show cause notice dated 02.01.2025 issued under Section 74 of the UPGST Act, 2017, was void and without jurisdiction, and if so, whether the High Court should intervene in its extraordinary writ jurisdiction, considering the petitioner's delay in approaching the court and participation in the proceedings. 2. Whether the adjudication order dated 03.09.2025 was passed in violation of the principles of natural justice, specifically by denying the petitioner a reasonable opportunity of hearing, as contemplated by Section 75(5) of the Act. Petitioner's arguments: The show cause notice was void and without jurisdiction. The adjudication order was passed without affording a reasonable opportunity of hearing. Reliance was placed on Godrej Sara Lee Ltd. vs. Excise and Taxation Officer-cum-Assessing Authority and others, (2023) 109 GSTR 402 and M/s G.R. Infra Projects Limited Ratlam vs. The State of Madhya Pradesh & ors, 2026 SCC OnLine SC 1084. Revenue's arguments: The petitioner has a statutory remedy of appeal against the adjudication order, and all issues can be pressed in that proceeding. The revenue stated that if the petitioner files a statutory appeal within two weeks, no objection would be raised.