The High Court of Jammu & Kashmir and Ladakh, in Zakir Hussain v. Union of India & Ors. (WP (C) No. 2812/2025, order dated 10 October 2025), has set aside a GST demand order passed under section 73 of the GST Act on the ground of violation of principles of natural justice.
In this case, the taxpayer had submitted a reply to the show cause notice after the due date mentioned in the notice but before the final order under section 73(9) was passed. The proper officer ignored the reply solely on the ground of delay and proceeded to confirm the demand.
The High Court held that section 73 does not prescribe a statutory time limit for filing a reply to the show cause notice. Once a reply is received before passing of the final order, the proper officer is legally bound to consider such reply. Ignoring the reply and passing an order without dealing with the taxpayer’s explanation renders the order unsustainable.
Accordingly, the Court quashed the impugned order and directed the tax authorities to pass a fresh order after considering the reply and granting an opportunity of personal hearing.
Key takeaway:
GST orders passed under section 73 without considering a reply filed before the final order—even if filed beyond the time mentioned in the SCN—are liable to be set aside for violation of natural justice.
Case Law Reference: Zakir Hussain v. Union of India & Ors. (J&K High Court)