Facts of the Case:
In this case, the petitioner was subjected to search proceedings wherein books of accounts were seized. Subsequently, a show cause notice in Form GST DRC-01 dated 21.09.2023 was issued proposing action under Section 74 of the GST Act. The petitioner duly filed a reply in Form GST DRC-06 on 21.11.2023. However, without granting any opportunity of personal hearing, the adjudicating authority proceeded to pass the impugned Order-in-Original dated 30.12.2023.
The petitioner challenged the said order on the ground of violation of principles of natural justice and non-compliance with Section 75(4) of the GST Act. The Revenue contended that the petitioner had opted “No” for personal hearing in the reply and therefore no hearing was granted.
Issue:
Whether an adjudication order passed under Section 74 without granting personal hearing is sustainable in law, particularly when the taxpayer had opted against personal hearing in the reply, in light of the mandate of Section 75(4) of the GST Act.
Held That:
The High Court held that the requirement of granting personal hearing under Section 75(4) of the GST Act is mandatory and cannot be dispensed with merely because the assessee has opted against personal hearing in the reply.
The statutory obligation cast upon the adjudicating authority overrides any such option exercised by the taxpayer. The Court observed that adherence to principles of natural justice, particularly the rule of audi alteram partem, is fundamental to fair adjudication and cannot be compromised.
It was further held that adequate opportunity of hearing, including multiple opportunities as envisaged under law, must be granted before passing any adverse order. In the present case, the failure to provide such opportunity rendered the impugned order unsustainable in law. Accordingly, the Order-in-Original was quashed and set aside, and the matter was remanded to the adjudicating authority for fresh adjudication after affording proper opportunity of hearing. The Court clarified that it had not examined the merits of the case.
Case Name: Komal Jayeshbhai Hemavat Versus State Tax Officer (4) & Anr. dated 02.04.2026
To read the complete judgement 2026 Taxo.online 892
