No adverse order can be passed without the opportunity of personal hearing

The Hon'ble Allahabad High Court in Jagjit Enterprises (P.) Ltd. v. State of U.P. [Writ Tax No. 1159 of 2025, dated October 17, 2025]quashed an order passed under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017 ("the UPGST Act") without giving any opportunity of personal hearing to the petitioner, following the rationale of the Division bench of the same Court in Mahaveer Trading Company v. Deputy Commissioner, State Tax, Writ Tax No. 303 of 2024 dated March 4, 2024.

Facts:

M/s Jagjit Enterprises (P.) Ltd. ("the Petitioner") was issued a Show Cause Notice ("SCN") followed by the adverse order ("the Impugned Order") dated December 31, 2023, under Section 73 of the UPGST Act without issuing any further notice or an opportunity for a personal hearing.

The petitioner appealed against the impugned order before the appellate authority, which was also dismissed on September 23, 2025, for being barred by limitation.

Aggrieved, the petitioner has filed the present writ petition.

Issues:

Whether an adverse order can be passed without providing an opportunity of a personal hearing?

Held:

The Hon'ble Allahabad High Court in Writ Tax No. 1159 of 2025 held as under:

• Relied on, Mahaveer Trading (supra), in which it was observed that it is basic to procedural law under taxing statutes that the opportunity of personal hearing must be provided to an assessee before any assessment/adjudication order is passed against him. It was further held in Mahaveer Trading (supra)that, mere change in the substantive law, cannot deny the mandatory requirement of procedural law, and the opportunity of personal hearing thereof. Hence, as per Section 75(4) of the UPGST Act, it is mandatory that an opportunity for a personal hearing be provided to the assessee before the passing of an adverse order.
• Observed that, in Mahaveer Trading (supra), it was further held that if the noticee chooses to waive the right of personal hearing or fails to avail the opportunity of personal hearing granted by the adjudicating authority, then the adjudicating authority (in those facts), is allowed to proceed to deal with the case on the merits, ex parte.
• Held that, the matter is remanded to the assessing authority to pass fresh order after giving an opportunity of hearing to the petitioner.

Our Comments:

Section 75(4) of the UPGST Act:

"An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person."

The Hon'ble Chhattisgarh High Court in Mahindra & Mahindra Ltd. v. Union of India [WA No. 172 of 2024 dated April 10, 2024] held that no adverse can be passed without giving an opportunity of personal hearing as mandated under section 75(4) of the CGST Act. The Hon'ble High Court held that the principles of Natural justice must be followed. The officials taking action of a judicial nature must give an adequate opportunity of being heard to a person against whom action is proposed to be taken.

OFFICIAL JUDGMENT COPY HAS BEEN ATTACHED