Navin Tent House Vs State of Rajasthan (Rajasthan High Court)
Challenge to GST Assessment Order
Navin Tent House filed a writ petition before the Rajasthan High Court challenging the assessment order dated 03.06.2026. The petitioner contended that the order was passed without considering its reply and without granting a requested personal hearing, contrary to Section 75(4) of the Central Goods and Services Tax Act, 2017.
The respondents had issued a show-cause notice dated 24.03.2026 under Section 74(1) concerning tax, interest and penalty for Financial Year 2022-23. The notice prescribed 24.04.2026 as the due date for filing a reply. The petitioner filed its reply on 06.05.2026 along with a written request for personal hearing. The respondents subsequently passed the adverse assessment order on 03.06.2026.
Petitioner’s and Respondents’ Submissions
Petitioner’s Submissions
The petitioner submitted that Section 75(4) requires an opportunity of personal hearing where a written request is made or an adverse order is contemplated. Although its reply and hearing request were filed after the prescribed reply date, the petitioner argued that the authorities could not ignore them because no ex parte order had been passed when they were submitted.
The petitioner also pointed out that the assessment order recorded that no reply had been filed, despite the reply dated 06.05.2026 being available before the order was passed.
Respondents’ Submissions
The respondents contended that the reply was not filed within the stipulated period and that the request for personal hearing was also received after the prescribed period. They therefore argued that the later reply and hearing request were not required to be considered and that the proceedings were validly decided ex parte.
Rajasthan High Court’s Findings on Section 75(4)
The Court referred to Section 75(4), which provides that an opportunity of hearing shall be granted where a written request is received from the person chargeable with tax or penalty, or where an adverse decision is contemplated.
The Court held that issuance of a show-cause notice itself indicates contemplation of adverse proceedings. Therefore, where an adverse decision is contemplated, a written request is not required for an opportunity of hearing under Section 75(4).
The Court also considered whether the provision includes personal hearing. The DRC-01 form accompanying the show-cause notice specifically contained fields concerning the date, time and venue of personal hearing. The Court noted that the material did not show that any date for personal hearing had been fixed after expiry of the reply period and before the petitioner’s written request dated 06.05.2026.
Assessment Order Set Aside and Exemplary Costs Imposed
The Court found that the impugned order proceeded on the premise that no reply had been filed, although the petitioner’s reply had been submitted before the order was passed. The Court held that the assessment order was therefore liable to interference.
The writ petition was allowed and the assessment order dated 03.06.2026 was set aside. Respondent No.3 was directed to pay exemplary costs of ₹10,000 to the petitioner within one month.
The respondents were given liberty to initiate fresh proceedings from the stage of considering the petitioner’s reply and after providing an opportunity of personal hearing as required under law. Pending applications, if any, were disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. The present writ petition has been filed challenging the assessment order dated 03.06.2026 (Annex.7) primarily on the ground that despite reply being filed by the petitioner and request being made for grant of personal hearing prior to passing of the said impugned order, the respondent(s), without considering the reply and without giving an opportunity of personal hearing, passed the impugned order contrary to the provisions of Section 75(4) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the Act of 2017’).
2. The case of the petitioner is that the respondent(s) issued a show-cause notice dated 24.03.2026 (Annex.5) under Section 74(1) of the Act of 2017 requiring it to show cause as to why the amount mentioned in the notice be not demanded and recovered from the petitioner towards tax, interest and penalty for the Financial Year 2022-23. The due date for filing a reply to the show-cause notice was 24.04.2026 being 30 days from the date of receipt of the notice. The petitioner filed its reply on 06.05.2026 (Annex.6) along with a written request for grant of a personal hearing before any adverse order is passed against the petitioner, however, the respondent authorities passed an adverse ex parte order dated 03.06.2026 assessing liability against the assessee towards short paid tax, interest and penalty, without considering the reply as well as without granting any opportunity of personal hearing. Therefore, the petitioner is before this Court.
3. Learned counsel appearing on behalf of the petitioner submits that as per Section 75(4) of the Act of 2017, an opportunity of personal hearing has to be granted where there is a written request from the assessee or where any adverse order is contemplated against such person. In the present case, although the reply and written request for personal hearing were filed by the petitioner subsequent to the due date prescribed for filing the reply, however, as the respondent authorities had not passed an ex parte order by the date on which the reply and written request were filed, the respondent authorities could not have ignored the reply and the written request made by the petitioner seeking an opportunity of personal hearing. Hence, the impugned order is not sustainable.
4. It is also his contention that the impugned order clearly records that no reply had been filed by the petitioner till the date of passing of the impugned order, which is contrary to the facts and material available on record and the respondent(s), without application of mind has passed the impugned order, which requires to be interfered with.
5. Per contra, the submission of the learned counsel appearing on behalf of the respondent authorities is that the show-cause notice was issued on 24.03.2026, which clearly prescribed the last date for submission of the reply and also required the petitioner to appear for a personal hearing, however, as no reply was filed within the stipulated time, the petitioner was not entitled to seek consideration of the reply filed beyond the prescribed period.
6. It is also the stand of the learned counsel appearing on behalf of the respondents that, since the written request was not received within the prescribed time for filing the reply and for seeking a personal hearing, any request received at a later point of time cannot be considered for grant of an opportunity of personal hearing. The respondent authorities, therefore, proceeded to decide the proceedings ex parte on account of non-furnishing of a reply within the stipulated time and thus, he contends that the impugned order is justified.
7. In this regard, it is apposite to refer to Section 75(4) of the Act of 2017, which reads as under:
“75 General provisions relating to determination of tax.
(1) ……………..
(2) ……………..
(3) ……………..
(4) An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.”
8. From a plain reading of the above provision, it is clear that an opportunity of hearing is required to be granted where a person chargeable with tax or penalty makes a written request for such an opportunity. The said provision also provides that where an adverse decision is contemplated against such person, opportunity of hearing has to be granted. The issuance of a show-cause notice itself is an indication of the contemplation of adverse proceedings against the noticee. Therefore, as per sub-section (4) of Section 75 of the Act of 2017 a written request is not even required in a case where an adverse decision is contemplated.
9. The next question that arises is whether an opportunity of hearing under Section 75(4) of the Act of 2017 includes an opportunity of personal hearing. An opportunity of hearing may be afforded at various stages and granting time to file a reply also constitutes an opportunity of hearing before a decision is taken on the contemplated action. However, the provision does not clearly indicate as to whether Section 75(4) of the Act of 2017 includes grant of personal hearing as well. Therefore, we have to fall back upon the relevant DRC-01 Form, which forms part of the show-cause notice. The DRC-01 Form reads as under:
DRC 01 2022-23.pdf : drc 01
Details of personal hearing and due date to file reply.
| Sr. No. | Description | Particulars |
| 1 | Date by which reply has to be submitted | 24-04-2026 |
| 2 | Date of personal hearing | NA |
| 3 | Time of personal hearing | NA |
| 4 | Venue where personal hearing will be held | NA |
10. The contents of the show-cause notice read along with the DRC-01 Form, clearly stipulates that there is a specific contemplation of grant of personal hearing even after the passing of the due date for submission of reply. In the present case, there is no material on record to indicate that, after the expiry of the due date for submission of the reply, any date was fixed for a personal hearing before the written request was made by the petitioner on 06.05.2026.
11. A plain reading of the impugned order reveals that it does not refer to any date fixed for personal hearing after the expiry of the due date for submission of the reply. Rather, the impugned order proceeds on the premise that no reply has been filed by the petitioner and decides the matter without considering the reply actually filed on 06.05.2026, which was much before the date of passing of the impugned order being 03.06.2026. Therefore, the impugned order is liable to be interfered with.
12. We have clearly noticed that, despite the submission of the reply, the authorities proceeded as if no reply had been filed. There is a gross dereliction on the part of the concerned authority in applying its mind to the proceedings pending before it. As a result of such improper application of mind, the assessee was subjected to undue hardship and was compelled to approach this Court, thereby incurring unnecessary costs. Therefore, we are inclined to impose exemplary costs as well.
13. In the result, the present writ petition is The impugned assessment order dated 03.06.2026 (Annex.7) is set aside. Respondent No.3 shall pay exemplary costs of Rs.10,000/- to the petitioner, and the said costs shall be paid within a period of one month from today.
14. The respondents are at liberty to initiate fresh proceedings from the stage of consideration of the reply and after providing an opportunity of personal hearing as required under the law.
15. All pending application(s), if any, shall stand disposed of.
