The Allahabad High Court held that statutory interest follows any adjudicated liability, though it quashed a ₹1.11 crore Section 74 order because the notice was served only on the portal and no hearing was given.
The Allahabad High Court has held that interest omitted from a show cause notice (SCN) can still be included in the final order without breaching Section 75(7) of the UPGST Act, because once liability is adjudicated, interest follows under Section 50. It nonetheless quashed the Section 74 order for 2024-25, as the petitioner had not been heard. [Jeet Agencies v. State of U.P. & Ors., 2026-juristway.com-3304-HC(Allahabad)-GST]
Justice Shekhar B. Saraf and Justice Amitabh Kumar Rai decided the writ petition against an order dated 24 Jun 2026 raising a total demand of ₹1,10,94,789.16. The Court found that the SCN dated 20 Feb 2026 had not been served on the petitioner apart from its notification on the portal.
The petitioner sought quashing of the order and a restraint on recovery while the petition was pending, and in the alternative a remand for fresh adjudication with an opportunity to produce its records. Its counsel also argued that the order breached Section 75(7), as the SCN did not mention interest but the order included it.
The Court rejected that argument. When the final order is passed and liability is adjudicated, it held, “the interest portion automatically comes into play as per Section 50” of the UPGST Act, so its inclusion in the order does not exceed the notice.
Even so, in the peculiar facts of the case, and since the order of 24 Jun 2026 had been passed without an opportunity of hearing, the Court quashed it and directed the authority to hear the petitioner before passing a fresh order. With the consent of both sides, the hearing was fixed for 26 Nov 2026 at 11:00 am before the officer concerned, and the petitioner undertook to appear without seeking any adjournment.
2026-juristway.com-3304-HC(Allahabad)-GST
