Facts of the Case:

In this case, the petitioner challenged an ex-parte order passed u/s 73 imposing demand including tax, interest, and penalty. The SCN was issued on 14.11.2024, which required the petitioner to file a reply by 13.12.2024, and also fixed a date of personal hearing on 20.12.2024. It was admitted that the petitioner did not appear on the date of hearing. However, after 20.12.2024, the department did not issue any further notice or communication informing the petitioner that the matter would be taken up on 15.02.2025, the date on which the assessment order was ultimately passed.

The petitioner contended that the order under Section 73 was passed without providing any physical or oral hearing, and without confronting the adverse material. It was further submitted that the appellate authority dismissed the appeal solely on limitation without considering that the original order itself was passed in violation of natural justice. The case was thus argued to be squarely covered by the High Court’s earlier ruling in Shubham Steel Traders.

Issue:

Whether an assessment order under Section 73 passed without issuing notice of the actual date of hearing at which the order is proposed to be passed, constitutes a violation of the principles of natural justice, thereby rendering the order invalid.

Held that:

The Court noted from the record that although the show cause notice contained one date of hearing—20.12.2024—the petitioner was never informed or given notice regarding the hearing on 15.02.2025, the date on which the ex-parte order was passed. The Court emphasized that compliance with natural justice requires not only issuance of an SCN but also providing a fair and effective opportunity of hearing before passing an adverse order.

The Court relied heavily on the principles laid down in the earlier judgment of the Coordinate Bench in M/s Shubham Steel Traders v. State of U.P. (2024), which held that an order passed without notifying the assessee of the date on which it is proposed to be passed is unsustainable. The same reasoning squarely applied to the present case.

Thus, the Court held that the original order under Section 73 was passed in gross violation of natural justice, and was therefore non est. Consequently, the appellate order dismissing the appeal as time-barred was also rendered unsustainable.

Case Name: Gangotri Engineers Thru. Proprietor Rajeev Pandey Versus State Of U.P. Thru. Addl. Chief Secy. State Tax Lko And 3 Others dated 14.11.2025

To read the complete judgement 2025 Taxo.online 3006