Hearing Before Reply? HC Calls It Unfair, Quashes GST Assessment Orders Citing Principles of Natural Justice

The Allahabad High Court quashed GST assessments and appellate orders against the owner of a company, holding that scheduling a date of personal hearing prior to the date of furnishing a reply to the notice is a violation of principles of natural justice. Case remanded, directing authorities to provide a fair hearing and pass a fresh order per law.

Noor Alam Khan, proprietor of the company named M/S Hind Construction, has filed a writ petition in the Allahabad High Court, challenging an order dated January 03, 2022, passed under Section 73 of the U.P. Goods and Services Tax Act, 2017, and additionally challenged another order dated February 11, 2026, wherein the petitioner’s appeal was dismissed for being filed beyond the statutory time limit.

During the hearing before the high court, the petitioner claimed that he was not given a proper opportunity of hearing before issuing the impugned order under Section 73 of the GST Act. Additionally, the scheduled date for the personal hearing was prior to the date of filing the reply to the show cause notice (SCN), which is not fair as per the law.

The tax authorities acknowledged their mistake that, indeed, the date of the personal hearing was prior to the date of filing a reply to the notice. To announce the decision, the court cited a ruling of the Division Bench of this Court in Writ Tax No. 303 of 2024 [Mahaveer Trading Company Vs Deputy Commissioner, State Tax, and Another], which explicitly held that granting a personal hearing is an obligatory requirement under GST law, especially when an adverse decision is likely. The law under Section 75(4) requires authorities to give a fair chance to the taxpayer to present their case.

The court noted that such behaviour of the tax authorities is a clear contravention of the principles of natural justice. It also noted official instructions issued by the tax department emphasising that the reply must come before the hearing date and a proper hearing must be ensured.

Based on the aforementioned findings, the court held the impugned order was legally invalid. Therefore, quashed both the assessment order and the appellate order. The matter has been remanded to the tax authorities with directions to pass a fresh order after giving the petitioner a proper opportunity of personal hearing.