Show-Cause Notice in Form GST DRC-01 issued without Personal Hearing is Invalid: Gujarat HC [Read Order]

A division bench of the Gujarat High Court has quashed the show-cause notices in form GST DRC-01 holding that the same are issued without affording personal hearing to the assessee.

Justice N.V.Anjaria and Justice Bhargav D. Karia was considering a petition filed by M/S Hitech Sweet Water Technologies Pvt. Ltd, wherein the petitioner received three show-cause notices for the respective years in form GST DRC-01 dated 13.03.2022 for the years 2017-18, 2018- 19 and 2019-20 and amount of Rs.5,46,79,672/-, Rs.2,33,65,984/- and Rs.1,35,60,109/-, was claimed from the petitioner.

Before the Court, the petitioner contended that the order came to be passed in gross violation of principles of natural justice inasmuch as the petitioner was not granted opportunity of being heard. The petitioner further relied on different judgments including M/s. Alkem Laboratories Ltd. Vs. Union of, and contended that when adverse order was passed without giving opportunity of personal hearing, it was liable to be quashed.

Accepting the above contentions, the Court held that “there is no gainsaying that the impugned orders came to be passed without extending opportunity of personal hearing to the petitioner. In respect of the orders relating to three assessment years, the petitioner was not heard. While it is true that in reply in prescribed form given by the petitioner, inresponse to show-cause notice, the petitioner has indicated that he did not opt for personal hearing.”

Quashing the impugned orders, the Court held that “Only on the ground of non-compliance of principles of natural justice in form of not giving opportunity of personal hearing and in order that the competent authority is enabled to decide afresh as per the statement of the learned AGP, the three impugned orders dated 19.04.2022 (Annexures-C-1 to C3 in the petition) issued by respondent no.2 are set aside. The competent authority, respondent, will give opportunity of personal hearing to the petitioner within three weeks from today and pass in accordance with law, fresh orders within two weeks from the date of affording such personal hearing.”

To Read the full text of the Order CLICK HERE

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