M/S SHAKAR TRADING COMPANYversusUNION OF INDIA AND 3 OTHERS

         HIGH COURT OF JUDICATURE AT ALLAHABAD
                       WRIT TAX No. - 2189 of 2026

M/S Shakar Trading Company
                                                             .....Petitioner(s)
                                   Versus

Union Of India And 3 Others
                                                           .....Respondent(s)

Counsel for Petitioner(s)           :   Ashok Pandey, Srestha Pandey
Counsel for Respondent(s)           :   A.S.G.I., Dhananjay Awasthi

Court No. - 3
                HON'BLE SAUMITRA DAYAL SINGH, J.
                HON'BLE SWARUPAMA CHATURVEDI, J.

1. Office to correct the computerized record to reflect the name of the
petitioner as 'Shankar Trading Company' and not 'Shakar Trading
Company'.

2. Heard Shri Ashok Pandey, learned counsel for the petitioner, Shri
Dhananjay Awasthi and Shri Sanjay Kumar Om, learned counsel for the
respondent.

3. Present petition is directed against the order dated 22.12.2025, whereby
penalty has been confirmed against the petitioner M/s Shankar Trading
Company, arising from show cause notice dated 31.05.2024 issued under
section 74 of the Central Goods and Services Tax Act, 2017.

4. At the outset, learned counsel for the petitioner has stated that the
challenge to Notification no. 2/2022 dated 11.03.2022 and further
Notification no. 27/2024 dated 25.11.2024, as also the amending
Notification no. 2/2017 dated 19.06.2017, is not pressed.

5. Accordingly, prayer no. 3 is rejected as not pressed.

6. On the issue of prayer no. 1 and 2, it is seen that the show cause notice
dated 31.05.2024 has culminated in the order dated 22.12.2025. Also no
jurisdictional error may exist in that show cause notice.

7. Further, almost two years have passed since issuance of show cause
notice. Therefore, challenge to show cause notice dated 31.05.2024 may
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also not succeed.

8. As to the challenge to the order dated 22.12.2025 confirming various
demands of penalty, amongst others it has been strenuously urged that at
the initial stages of investigation, the petitioner was arrested. He was
enlarged on bail late in the year 2025. Therefore, he could not fully
respond to the show cause notice. In any case, the reply filed by the
petitioner has not been considered. Practically, on an ex-parte
consideration, the demand of penalty has been confirmed. In that regard,
it has also been contended that part of the proceedings are barred on the
test of section 6(2)(b) of the Act. Also objection has been raised as to
composite notice being without jurisdiction.

9. On the other hand, learned counsel for the revenue would contend that
the issue of composite notice has been answered against the petitioner and
in favour of the revenue by earlier decision of a coordinate bench in M/S
SA Aromatics Pvt. Ltd. and another Vs. Union of India and 5 others,
2026:AHC:14559-DB. At the same time, with respect to denial of
opportunity of hearing, it could not be denied that petitioner had remained
confined and that at present, it may be arguable that due opportunity of
hearing has remained to be granted to the petitioner and if the objections
raised by the petitioner were duly considered.

10. On further query, Shri Dhananjay Awasthi, learned counsel for the
revenue also informed that the similar cases arising from the same show
cause notice, other proceeding have been remanded to the adjudicating
authority, to pass fresh order after giving appropriate opportunity of
hearing to the petitioner.

11. The present writ petition is disposed of on the following terms :

(i) The impugned order dated 22.12.2025 is set aside and the matter
is remitted to the adjudicating authority to pass a fresh order.

(ii) For that purpose, the Adjudicating Authority may issue to the
petitioner, a fresh copy of the original Show-Cause notice together
with copies of RUDs and a list of non-RUDs. That compliance may
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                             3


be made within a period of two weeks from today.

(iii) Upon receipt of such communication, the petitioner may apply
to the Adjudicating Authority - to be supplied any other document
including copies of non-RUDs, within a further period of one week
therefrom.

(iv) Subject to such compliance, the application moved by the
petitioner may be considered by the Adjudicating Authority within a
further period of one week. Copies of all other documents to be
supplied to the petitioner may be made available within that time. If
copy of any document or non-RUD, is to be declined, adequate
reasons may be communicated to the petitioner, within that time.

(v) Thereafter, the Adjudicating Authority may fix appropriate date
in the proceeding with atleast 15 days advance notice. The petitioner
undertakes to cooperate in the proceedings and not seek any undue or
long adjournment.

(vi) At that stage, if the revenue seeks to rely on statement of any
person, recorded during investigation etc., the same would
necessarily be made available to the petitioner on the date fixed in
the proceedings. On that date itself, the petitioner may apply for
opportunity to cross-examine any witness being relied by the
revenue.

(vii) Wherever the revenue seeks to rely on adverse statement made
against the petitioner, normally opportunity of cross-examination, if
prayed for, may be allowed to the petitioner. If such opportunity is to
be declined, adequate reasons for the same may be communicated to
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                                    the petitioner within a week of its application.

                                    (viii) Accordingly, the proceedings may continue such that the same
                                    may be concluded within a period of six months from today, after
                                    affording due opportunity of personal hearing to the petitioner.

                                    May 5, 2026
                                    Bhanu

                                                    (Swarupama Chaturvedi,J.) (Saumitra Dayal Singh,J.)




Digitally signed by :-
BHANU PRATAP KUSHWAHA
High Court of Judicature at Allahabad