Failure to intimate specific date for personal hearing violates Section 75(4) and principles of natural justice.

In brief

The question

1. Whether the passing of an adjudication order on the same day the reply was filed, without prior intimation of a hearing date, constitutes a violation of the principles of natural justice and Section 75(4) of the Act.

The court held

The court held that the procedure followed was in direct violation of the mandatory requirements of Section 75(4) of the Act.

It also directed

The High Court allowed the writ petition and set aside the impugned order dated 26.12.2025 and the consequential recovery proceedings.

The matter was remanded to the respondents with a direction to fix a fresh date for hearing with due intimation to the petitioner and to pass a fresh order strictly in accordance with law; all other legal contentions were left open for the proper officer to decide.

01Facts

The petitioner, an industrial entity, was served with show-cause notices (SCNs) dated 14.05.2025 and 08.12.2025 under Section 74 of the Uttarakhand Goods and Services Tax (UGST) Act, 2017, alleging the utilization of inadmissible Input Tax Credit (ITC) worth approximately ₹8.5 crores.

¶ 3

On 26.12.2025, the petitioner submitted a formal reply to the SCN and specifically requested a personal hearing.

¶ 4-5

On the very same day the reply was filed, the Respondent Authority passed an adverse order under Section 74(9) imposing tax and penalties, and subsequently initiated recovery proceedings via DRC-01D on 05.03.2026.

¶ 2 & 4

The petitioner challenged these orders on the grounds of violation of natural justice and procedural defects in the SCN.

¶ 5

02Issues

i.1. Whether the passing of an adjudication order on the same day the reply was filed, without prior intimation of a hearing date, constitutes a violation of the principles of natural justice and Section 75(4) of the Act.

¶ 6-8

ii.2. Whether the impugned order dated 26.12.2025 and subsequent recovery proceedings are liable to be set aside for procedural impropriety.

¶ 9

03Law Applied

Section 75(4) of the Uttarakhand Goods and Services Tax Act, 2017, which mandates that an opportunity of hearing shall be granted to a person where a request is made in writing or where any adverse decision is contemplated.

¶ 7

Principles of Natural Justice, specifically the doctrine of audi alteram partem, which requires that a hearing must be meaningful and not a mere formality or "eyewash".

¶ 8

Provisions in the judgment · 3 · Linked ones open on LawLens

UTTARAKHAND GOODS AND SERVICES TAX ACT, 2017 Section 74 Section 75 Section 122

04Reasoning

The court observed that although the respondent claimed the petitioner was heard, it was undisputed that the order was passed on the same day the reply was submitted.

¶ 6

The court reasoned that for an "opportunity of hearing" to be legally valid under Section 75(4), the date must be intimated in advance.

¶ 8

A hearing conducted on the day of filing a reply is insufficient because a party cannot be expected to be prepared for oral arguments at the moment of submitting written pleadings.

¶ 8

The court found the respondent's procedure to be a mechanical "eyewash" rather than substantive compliance with the statutory mandate.

¶ 8

The court noted the petitioner’s contention that the SCN lacked the essential ingredients of Section 74, though it primarily focused on the procedural lapse regarding the hearing.

¶ 5 & 9