Tick mark in Form GST DRC-06 Shows Intention to Avail Opportunity of Hearing : Orissa HC Quashes GST Order Passed Without Considering Personal Hearing [Read Order]

In a recent ruling, the Orissa High Court quashed a GST assessment order after finding that the adjudicating authority passed the order without considering the assessee's reply or granting a personal hearing despite a specific request for one.

The case involved Janardan Panda, a petitioner who challenged an Order-in-Original dated 26th December 2025, passed under Section 73 of the GST Act, along with a rectification order dated 6th January 2026. The authorities had raised a demand of Rs. 57,30,708/- towards tax, interest, and penalty for the tax periods from April 2021 to March 2022, alleging non-payment of tax on royalty, DMF, EMF, dead rent, and surface rent under the reverse charge mechanism.

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The Petitioner argued that he had furnished a reply to the show cause notice on 17th September 2025, categorically stating that no taxable event had occurred as mining operations had not commenced. Crucially, he highlighted that in Form GST DRC-06, he had put a tick mark against the option to avail a personal hearing.

The Court noted that the Adjudicating Authority, in the Order-in-Original, erroneously stated that the "Tax payer has neither replied to the SCN nor appeared for personal hearing." Subsequently, the authority passed a rectification order under Section 161, acknowledging the receipt of the reply but still failing to afford a personal hearing.

The Division Bench comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman observed that the authority's actions were in "flagrant violation of principles of natural justice." The Court noted that the points raised in the reply did not find a place in the impugned order, indicating that the authority had mechanically proceeded to adjudicate the transactions.

"Reply to show cause notice cannot be said to be empty formality or useless lumber... In absence of independent application mind, this Court cannot sustain the impugned order," the Court stated.

Accordingly, the High Court quashed both the assessment order and the rectification order, remanding the matter back to the adjudicating authority for fresh consideration on merits after affording the petitioner a reasonable opportunity of hearing.

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