Non-Specification of Date and Time for Hearing  in Two SCNs issued in a Gap of 4 Months: Madras HC sets aside GST S.73 Order [Read Order]

In a recent ruling, the Madras High Court has set aside an order passed under Section 73 of the Goods and Services Tax ( GST ) Act on the ground that the principles of natural justice were violated due to the absence of specific mention of date and time for personal hearing in two successive show cause notices ( SCNs ) issued four months apart.

The petitioner, M.S. Distributors challenged the impugned order dated 29.12.2023, passed by the GST authorities without adequately affording an opportunity of personal hearing.

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The petitioner, represented by Mr. P. Pranav Jain, pointed out that the first SCN dated 12.05.2023 merely called for a reply on or before 31.05.2023 but failed to specify the date and time for a personal hearing. A second SCN dated 27.09.2023 was later issued, which again omitted details regarding the hearing.

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Despite this, the petitioner's representative appeared on 29.12.2023 and sought additional time to file a reply with supporting documents. However, the authorities proceeded to pass the final order on the same day without granting the requested adjournment. This sequence of events, according to the Court, clearly demonstrated a breach of the principles of natural justice.

The Additional Government Pleader, Mr. T.N.C. Kaushik, submitted that if the petitioner had complied with the Court’s earlier conditional stay order, the impugned order could be set aside.

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The Court noted that the petitioner had indeed deposited 10% of the disputed tax and had further remitted an additional sum of ₹2,51,301 via bank transfer. Justice C. Saravanan, after considering the submissions and examining the records, held that the absence of any intimation regarding the date and time for personal hearing in both SCNs, and the undue haste with which the final order was passed on the very date the petitioner requested additional time, amounted to a gross violation of the principles of natural justice.

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Accordingly, the Court quashed the impugned order dated 29.12.2023 and remanded the matter back to the adjudicating authority for fresh consideration. The petitioner has been directed to file a detailed reply with all supporting documents within two weeks from the receipt of the order. The authority is further directed to issue a fresh notice giving at least 14 days’ time for personal hearing before passing a new order in accordance with law.

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The Court also clarified that since the petitioner had paid more than the required 10% of the disputed tax, they are entitled to deduct the excess amount from future payments. The writ petition was thus allowed without costs, and connected miscellaneous petitions were closed accordingly.

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To Read the full text of the Order CLICK HERE

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