GST Dept Counsel Admits No Personal Hearing Granted before Passing Order: Madras HC remands Matter on Pr-edposit Requirement [Read Order]

The Madras High Court has quashed a GST assessment order that was passed without granting the petitioner an opportunity for a personal hearing. Notably, the counsel for the GST department herself conceded before the Court that no such hearing had been provided, in clear contravention of the mandatory requirement under Section 75(4) of the CGST Act.

The case concerned a writ petition contesting the tax authority's contested order of August 30, 2024, which was issued without giving the petitioner a chance for a personal hearing. According to the petitioner, the respondent sent out a show-cause notice on May 22, 2024, and then reminders on July 3, 2024, and April 17, 2024.

In response, the petitioner sought additional time through a communication dated 28.08.2024 to collect requisite documents to substantiate their case. However, the respondent proceeded to pass the final order just two days later, without granting any extension or personal hearing.

Counsel for the petitioner argued that this abrupt action contravened Section 75(4) of the GST Act, which mandates a personal hearing before passing any adverse order. Moreover, it was submitted that Rs. 1,64,160 had already been deducted from the petitioner’s Electronic Credit Ledger (ECL), and the petitioner was willing to pay 25% of the remaining disputed tax.

The Government Advocate for the respondent admitted that no personal hearing had been granted and agreed to a remand, subject to the petitioner paying 25% of the disputed amount (adjusted for the earlier deduction).

Considering the submissions, Justice Krishnan Ramasamy observed that the impugned assessment order had been passed in clear violation of the statutory mandate under Section 75(4) of the GST Act and the principles of natural justice.

Accordingly, the Court set aside the order dated 30.08.2024 and remanded the matter to the respondent authority for fresh consideration. The Court directed the petitioner to pay 25% of the disputed tax amount, after adjusting the sum already recovered, within a period of four weeks.

It further directed the petitioner to submit a detailed reply along with supporting documents within three weeks from the date of such payment. The respondent was instructed to issue a clear 14-day notice for personal hearing and thereafter pass a fresh, reasoned order on merits and in accordance with law, after granting the petitioner an opportunity to be heard.

Ms.Mitra B appeared for the petitioner and Ms.P.Selvi, GA appeared for the department.

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