M/S Sriram Traders Thru. Prop. Ajay vs State Of U.P. Thru. Prin. Secy. State Tax

Court: High Court of Judicature at Allahabad, Lucknow Bench

Case Number: WRIT TAX No. 327 of 2025

Judgment Date: 2025-04-11

Judges: Justice Pankaj Bhatia

Keywords: M/S Sriram Traders, Section 125, GST Penalty, Natural Justice, Opportunity of Hearing, GST Act 2017, Ajay Kumar Gupta, Allahabad High Court, ₹50000 GST Penalty, ₹25000 max penalty, GST writ petition, UP State Tax, Lucknow Bench, 2025 GST Case, WRIT TAX No. 327 of 2025, India-wide applicability, GST penalty quashed, High Court ruling, opportunity before penalty, GST procedural safeguards

Summary:

High Court quashed the penalty order for ₹50,000 under Section 125 of the GST Act for being passed without granting an opportunity of hearing, and remanded the case for fresh consideration.

Full Text:

**GUIDE FOR LAYMAN**



1️⃣ **What the Case Law is About:**

This case deals with a penalty imposed under **Section 125 of the GST Act**. The tax department fined the business ₹50,000 for a general offense under GST, **without giving the owner a chance to explain or defend**. The High Court said this is against the law and basic justice. Even under Section 125, **₹25,000 is the maximum**, not ₹50,000 per party.



2️⃣ **What to Do If You Face a Similar Situation:**

- If you get a penalty under GST, ensure you are **given a notice** and a chance to respond.

- **Don’t ignore the notice**. If no hearing is provided, you can approach the court.

- You can file a **writ petition** in High Court under Article 226 of the Constitution.



3️⃣ **What If You Didn’t File an Appeal Yet:**

- You can file a **writ petition** against arbitrary penalties if no appeal was filed.

- You can use this case as a **precedent**—especially if the GST officer didn’t give you a hearing.



4️⃣ **Future Precautions:**

- Always **respond to GST notices** in writing.

- Keep **all documents**, emails, and GST records organized.

- Insist on **your right to be heard** before any penalty is imposed.

- Use GST helplines or consult a tax professional.



5️⃣ **Applicability:**

This judgment is **applicable across India**, especially if GST authorities try to impose penalties **without proper hearing**. It reinforces your right to natural justice under **Section 125 of GST Act**.



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? **Court’s Order Highlighted Online:**

**"Order dated 20.01.2023 is quashed. The matter is remanded to the authority concerned to pass a fresh order after giving an opportunity of hearing in accordance with law."**



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? **KEYWORDS:**

M/S Sriram Traders, Section 125, GST Penalty, Natural Justice, Opportunity of Hearing, GST Act 2017, Ajay Kumar Gupta, Allahabad High Court, ₹50000 GST Penalty, ₹25000 max penalty, GST writ petition, UP State Tax, Lucknow Bench, 2025 GST Case, WRIT TAX No. 327 of 2025, India-wide applicability, GST penalty quashed, High Court ruling, opportunity before penalty, GST procedural safeguards

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