GST Order Without Date, Time and Venue of Hearing Quashed: Gujarat HC

Aarya Metals & Ors. Vs State of Gujarat & Anr. (Gujarat High Court)

Summary: The Gujarat High Court allowed the writ petition challenging an order passed under Section 74(1) of the Central Goods and Services Tax Act, 2017 (CGST Act), which sought recovery of Input Tax Credit (ITC) of Rs.7,63,026/- along with applicable interest under Section 50. The respondents alleged that inward supplies received from M/s.RK Battery and Scrap were non-genuine because the supplier was found to be a non-genuine and non-existent taxpayer, and consequently the ITC was alleged to be inadmissible under Section 16(2) of the CGST Act.

The petitioners contended that neither the show-cause notice dated 04.08.2024 nor the subsequent reminders specified the date, time or venue of personal hearing. Three reminders dated 12.09.2024, 07.11.2024 and 18.11.2024 were issued, after which the petitioners filed a reply dated 21.11.2024 along with tax invoices issued by the supplier. The impugned order dated 07.12.2024 was thereafter passed in FORM GST DRC-07. The petitioners also contended that the order was a non-speaking, one-line order.

The respondents submitted that three reminders had been issued and that the petitioners had selected “No” in the column relating to personal hearing in their reply. They therefore contended that the petitioners were aware of the proceedings and the writ petition did not deserve to be entertained.

The High Court relied upon its decision in Aarti Enterprise Vs. State of Gujarat, where an identical issue concerning absence of intimation of the date, time and venue of personal hearing and an unreasoned order had been considered. The Court also referred to Komal Jayeshbhai Hemavat Vs. State Tax Officer (4) & Anr., in which the Court had set aside an order under Section 75(4) even though the assessee had selected “No” for personal hearing.

The Court concluded that the impugned order was liable to be quashed and set aside on three grounds: failure to intimate the date, time and venue of personal hearing; passing of a non-speaking order; and failure to afford three opportunities of personal hearing contemplated under Section 75(4) of the CGST Act.

The writ petition was accordingly allowed. The impugned order was quashed and set aside, and the matter was remanded to the jurisdictional State Tax Officer to pass a fresh order after affording the petitioners an opportunity of hearing in accordance with law within twelve weeks from receipt of the certified copy of the order. The Court clarified that the petitioners’ claim for refund along with interest would remain subject to the fresh order passed by the respondent authority after considering the defence raised by the petitioners.

Facts of the Case

The respondent-Commissioner issued a show-cause notice dated 04.08.2024 under Section 74(1) of the CGST Act seeking recovery of ITC of Rs.7,63,026/- along with applicable interest under Section 50.

The allegation was that inward supplies received from M/s.RK Battery and Scrap were non-genuine, as the supplier was found to be a non-genuine and non-existent taxpayer. Consequently, the ITC was alleged to be inadmissible under Section 16(2) of the CGST Act.

The petitioners stated that they were not aware of the show-cause notice. Thereafter, the respondent authorities issued reminders dated 12.09.2024, 07.11.2024 and 18.11.2024.

The petitioners submitted a reply dated 21.11.2024 along with the tax invoices issued by the supplier. The respondent authorities subsequently passed the impugned order dated 07.12.2024 in FORM GST DRC-07.

Petitioners’ Submissions

The petitioners submitted that the impugned order deserved to be quashed and set aside because neither the show-cause notice nor the subsequent reminders specified the date, time or venue of personal hearing.

It was further submitted that the reminders reflected “N.A.” against the particulars relating to the date, time and venue of personal hearing, thereby depriving the petitioners of an effective opportunity of hearing.

The petitioners also submitted that the impugned order was a non-speaking, one-line order and was liable to be quashed in light of the decision of this Court in Aarti Enterprise Vs. State of Gujarat.

Respondents’ Submissions

Opposing the writ petition, the learned AGP submitted that the petitioners had been issued three reminders.

It was further submitted that although the petitioners had responded to the proceedings, they had selected “No” in the column relating to personal hearing and were fully aware of the proceedings. On this basis, it was contended that the writ petition did not deserve to be entertained.

Failure to Specify Personal Hearing Details

The Court recorded that the petitioners were initially issued a show-cause notice dated 04.08.2024 under Section 74(1) of the CGST Act seeking recovery of ITC amounting to Rs.7,63,026/-.

The Court further recorded that the show-cause notice did not specify the date, time or venue of personal hearing. The three subsequent reminders dated 12.09.2024, 07.11.2024 and 18.11.2024 also failed to specify the date, time or venue of personal hearing.

Although the petitioners filed a reply in FORM GST DRC-06 on 21.11.2024 and selected “No” against the column relating to personal hearing, the Court considered the absence of intimation regarding the hearing details in the context of the statutory hearing requirement under Section 75(4) of the CGST Act.

Reliance on Aarti Enterprise

At the outset, the petitioners submitted that the issue was squarely covered by the Gujarat High Court’s decision in Aarti Enterprise Vs. State of Gujarat, reported as (2026) 39 Centax 31 (Gujarat).

The learned Assistant Government Pleader was unable to controvert the proposition advanced on behalf of the petitioners.

In Aarti Enterprise, the Court considered a situation where reminders had been issued but did not intimate the petitioner of the date, time or venue of personal hearing. The Court held that where such details were not incorporated in the notice, the petitioner was required to be intimated of the date, time and venue of personal hearing before a final order was passed.

The Court in that decision also observed that the proper officer was required to pass a reasoned order after considering the materials and that the absence of the petitioner from the proceedings did not absolve the State Tax Officer from passing a reasoned order.

The Court consequently quashed and set aside the impugned order and remanded the matter to the jurisdictional State Tax Officer for passing a fresh order after affording an opportunity of hearing.

Section 75(4) of the CGST Act

The decision in Aarti Enterprise, as reproduced in the present judgment, referred to Section 75 of the GST Act. Section 75(4), as reproduced, provides:

“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.”

The reproduced Section 75(5) further provides that the proper officer shall, if sufficient cause is shown, grant time and adjourn the hearing for reasons to be recorded in writing, subject to the proviso that no such adjournment shall be granted more than three times to a person during the proceedings.

Section 75(6), also reproduced in the judgment, requires the proper officer to set out the relevant facts and the basis of the decision in the order.

Effect of Selecting “No” for Personal Hearing

The Court also referred to its decision in Komal Jayeshbhai Hemavat Vs. State Tax Officer (4) & Anr., (2026) 185 taxmann.com 500 (Gujarat).

In that decision, the Court had set aside an order passed under Section 75(4) of the CGST Act even though the assessee had selected “No” in the column relating to personal hearing.

The observations referred to in the present judgment state that the authority was required to follow the mandate of Section 75(4) and grant an opportunity of further hearing. The decision also referred to the requirement of hearing before an adverse order and the principles of natural justice.

The Court in Komal Jayeshbhai Hemavat accordingly quashed and set aside the impugned order and remanded the matter to the respondent authorities to pass a fresh order.

Three Grounds for Quashing the Impugned Order

No Intimation of Date, Time and Venue

The first ground identified by the Court was the failure of the respondent authorities to intimate the petitioners of the date, time and venue of personal hearing.

Non-Speaking Order

The second ground was the passing of a non-speaking order. The Court referred to the impugned order as a two-line order directing recovery of the amount along with interest and penalty.

Failure to Afford Three Opportunities

The third ground was the failure to afford the petitioners three opportunities of personal hearing as contemplated under Section 75(4) of the CGST Act.

Reference to Yadav Trailor Transport Co.

While discussing Komal Jayeshbhai Hemavat, the present judgment refers to M/s. Yadav Trailor Transport Co. Vs. Union of India And Ors., rendered in Special Civil Application No. 3027 of 2025.

The judgment reproduces observations from Yadav Trailor Transport Co. concerning the requirement of adequate opportunity of hearing and the consequences of proceeding without such hearing. The reproduced observations state that a person should be served with proper notice and given a right to hearing, and that an order passed without adequate opportunity of hearing could warrant interference on the ground of breach of natural justice.

Reference to Regent Overseas Pvt Ltd

The judgment also refers to Regent Overseas Pvt Ltd Vs Union of India.

The observations reproduced in the judgment state that where three dates are fixed for personal hearing, those dates cannot themselves be treated as three adjournments. The provision concerning three adjournments would contemplate the original hearing date together with three adjourned dates.

The reproduced observations further state that where the notice for personal hearing was not served in accordance with law, the petitioners could not be treated as having remained absent on the dates specified in such notice, and an ex parte order passed in those circumstances would be in breach of principles of natural justice.

Final Decision

The Gujarat High Court held that the impugned order deserved to be quashed and set aside on the three grounds identified in the judgment: failure to intimate the date, time and venue of personal hearing; passing of a non-speaking order; and failure to afford the petitioners three opportunities of personal hearing contemplated under Section 75(4) of the CGST Act.

Accordingly, the writ petition succeeded. The impugned order was quashed and set aside and the matter was remanded to the jurisdictional State Tax Officer.

The jurisdictional State Tax Officer was directed to pass a fresh order after affording the petitioners an opportunity of hearing in accordance with law within twelve weeks from the date of receipt of the certified copy of the order. Rule was made absolute to that extent.

The Court clarified that, since the impugned order had been set aside, the petitioners’ claim for refund along with interest would remain subject to the fresh order that may be passed by the respondent authority after considering the defence that may be raised by the petitioners in the remanded proceedings.

Cases Discussed

• Aarti Enterprise Vs. State of Gujarat, (2026) 39 Centax 31 (Gujarat)
• Komal Jayeshbhai Hemavat v. State Tax Officer, (2026) 185 taxmann.com 500 (Gujarat)
• M/s. Yadav Trailor Transport Co. Vs. Union of India And Ors., Special Civil Application No. 3027 of 2025
• Regent Overseas Pvt Ltd Vs Union of India

FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT

1. Rule. Learned Assistant Government Pleader waives service of notice of Rule on behalf of the respondents.

2. At the outset, learned advocate Mr.Abhay Y. Desai, appearing for the petitioners has submitted that the issue involved in the present petition is squarely covered by the decision of this Court in the case of Aarti Enterprise Vs. State of Gujarat, (2026) 39 Centax 31 (Gujarat).

3. Learned Assistant Government Pleader Ms.Nimisha Parekh, was unable to controvert the aforesaid proposition.

4. A short issue involved in the present writ petition pertains to the absence of intimation regarding the date, time and venue of personal hearing in the show-cause notices issued to the petitioners, which ultimately culminated in the impugned order.

5. The respondent-Commissioner issued a show-cause notice dated 04.08.2024 under Section 74(1) of the Central Goods and Services Tax Act, 2017 (for short, “the CGST Act”), seeking to recover Input Tax Credit (ITC) of Rs.7,63,026/- along with applicable interest under Section 50 of the CGST Act. It was alleged that the inward supplies received from M/s.RK Battery and Scrap were non-genuine, as the supplier was found to be a non-genuine and non-existent taxpayer. Consequently, the ITC was alleged to be inadmissible under Section 16(2) of the CGST Act.

6. It is the case of the petitioners that they were never aware of the aforesaid show-cause notice. Thereafter, the respondent authorities issued three reminders dated 12.09.2024, 07.11.2024, and 18.11.2024. The petitioners submitted a reply dated 21.11.2024 along with the tax invoices issued by the supplier. However, the respondent authorities proceeded to pass the impugned order dated 07.12.2024 in FORM GST DRC-07.

7. It is submitted that the impugned order deserves to be quashed and set aside since neither the show-cause notice nor the subsequent reminders specified the date, time, or venue of personal hearing. It is further submitted that the reminders also reflected “N.A.” against the particulars of the date, time, and venue of personal hearing, thereby depriving the petitioners of an effective opportunity of hearing. It is further submitted that the impugned order is a non-speaking, one-line order and is liable to be quashed in light of the decision of this Court in the case of Aarti Enterprise (supra).

8. Opposing the writ petition, learned AGP Ms. Nimisha Parekh has submitted that the petitioners were issued three reminders. She has further submitted that although the petitioners had responded to the proceedings, they had selected “No” in the column relating to personal hearing and they were fully aware of the proceedings. Hence, she has submitted that the writ petition does not deserve to be entertained.

9. From the pleadings on record, the following facts emerge:

A. The petitioners were initially issued a show-cause notice dated 04.08.2024 under Section 74(1) of the CGST Act seeking recovery of ITC amounting to Rs.7,63,026/-.

B. The show-cause notice did not specify the date, time, or venue of personal hearing.

C. The respondent authorities thereafter issued three reminders dated 12.09.2024, 07.11.2024, and 18.11.2024, which also failed to specify the date, time, or venue of personal hearing.

10. It appears that the petitioners thereafter filed a reply in FORM GST DRC-06 on 21.11.2024, wherein they had selected “No” against the column relating to personal hearing.

Thereafter, the respondent authorities passed the two line impugned order directing recovery of the aforesaid amount along with interest and penalty.

11. At this stage, it would be apposite to refer to the decision of this Court in the case of Aarti Enterprise (supra), wherein, on an identical issue, this Court has held as under:

“5.1 Thereafter, the petitioner has been issued reminders on 31.12.2024, 08.01.2025 and 17.01.2025, three reminders as required under the provisions of Section 75(5) of the G.S.T Act. On a bare perusal of the same, it is revealed that the petitioner is not intimated of either the date, time or venue of personal hearing and thereafter the impugned order is passed by recording that though an ample opportunity was granted to the petitioner to remain present, he has not remained present. This is the only reason which is assigned in the impugned order. It is not in dispute that three opportunities are required to be given and as per provisions of section 75(5) of the G.S.T Act, three adjournments are required to be given. Section 75 of the G.S.T Act reads as under:

“Section 75. General provisions relating to determination of tax.-

1. Where the service of notice or issuance of order is stayed by an order of a court or Appellate Tribunal, the period of such stay shall be excluded in computing the period specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74 [or sub-sections (2) and (7) of section 74A], as the case may be.

2. Where any Appellate Authority or Appellate Tribunal or court concludes that the notice issued under sub-section (1) of section 74 is not sustainable for the reason that the charges of fraud or any wilful-misstatement suppression of facts to evade tax has not been established against the person to whom the notice was issued, the proper officer shall determine the tax payable by such person, deeming as if the notice were issued under sub-section (1) of section 73.

[(2A) Where any Appellate Authority or Appellate Tribunal or court concludes that the penalty under clause (ii) of sub­section (5) of section 74A is not sustainable for the reason that the charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not been established against the person to whom the notice was issued, the penalty shall be payable by such person. under clause (1) of sub­section (5) of section 74A].

3. Where any order is required to be issued in pursuant of the direction of the Appellate Authority or Appellate Tribunal or a court, such order shall be issued within two years from the date of communication of the said direction.

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.

5. The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing:

Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.

6. The proper officer, in his order, shall set out the relevant facts and the basis of his decision.

7. The amount of tax, Interest and penalty demanded in the order shall not be in excess of the amount specified in the notice and no demand shall be confirmed on the grounds other than the grounds specified in the notice.

8. Where the Appellate Authority or Appellate Tribunal or court modifies the amount of tax determined by the proper officer, the amount of interest and penalty shall stand modified accordingly, taking into account the amount of tax so modified.

9. The interest on the tax short paid or not paid shall be payable whether or not specified in the order determining the tax liability.

[(10) The adjudication proceedings shall be deemed to be concluded, if the order is not issued within the period specified in sub-section (10) of section 73 or in sub-section

10. of section 74 or in sub-section (7) of section 74A.

11. An issue on which the Appellate Authority or the Appellate Tribunal or the High Court has given its decision which is prejudicial to the interest of revenue in some other proceedings and an appeal to the Appellate Tribunal or the High Court or the Supreme Court against such decision of the Appellate Authority or the Appellate Tribunal or the High Court is pending, the period spent between the date of the decision of the Appellate Authority and that of the Appellate Tribunal or the date of decision of the Appellate Tribunal and that of the High Court or the date of the decision of the High Court and that of the Supreme Court shall be excluded in computing the period referred to in subsection (10) of section 73 or sub-section (10) of section 74 [or sub-sections (2) and (7) of section 74A] where proceedings are initiated by way of issue of a show cause notice under the said sections.

12. Notwithstanding anything contained in section 73 or section 74 [or section 74A], where any amount of self-assessed tax in accordance with a return furnished under section 39 remains unpaid. either wholly or partly, or any amount of interest payable on such tax remains unpaid the same shall be recovered under the provisions of section 79 [Explanation.-For the purposes of this sub-section, the expression “self-assessed tax shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39.]

13. Where any penalty is imposed under section 73 оr section 74 [or section 74A], no penalty for the same act or omission shall be imposed on the same person under any other provision of this Act.”

5.2 We are of the considered opinion that in case the aforesaid details of personal hearing are not incorporated in the notice DRC 01, before final order is passed against the assessee, he is required to be intimated the date, time and venue of personal hearing. We further clarify that respondents are not in fact required to issue Show Cause Notice calling upon him, but they are required to intimate the date, time and venue of personal hearing.

5.3 The second ground on which the impugned order is required to be set aside is that the same is absolutely an unreasoned order as though, the petitioner has remained absent in the proceedings, however, the same cannot absolve the State Tax Officer in passing the reasoned order after considering all the materials.

6 Hence, the writ petition succeeds. The impugned order dated 05.02.2025 issued by the respondent No.2 and subsequent proceedings arising from the impugned orders are hereby quashed and set aside. The matter is remanded to the jurisdictional State Tax Officer. He shall pass a fresh order after affording an opportunity of hearing to the petitioner an in accordance with law within a period of 12 weeks from the date of receipt of certified copy of this order. Rule is made absolute accordingly with no orders as to costs. “

12. We may also refer to the decision of this Court in the case of Komal Jayeshbhai Hemavat vs. State Tax Officer, (2026) 185 taxmann.com 500 (Gujarat), wherein this Court set aside an order passed under Section 75(4) of the CGST Act even though the assessee had selected “No” in the column relating to personal hearing. The relevant observations read as under:

7. It was incumbent upon the authority to follow the mandate of Section 75(4) of the GST Act and grant opportunity of further hearing. This Court in the decision in the case of M/s. Yadav Trailor Transport Co. Vs. Union of India And Ors., rendered in Special Civil Application No. 3027 of 2025, has held as under:

” 9.1 It has been categorically observed by this Court in the case of Regent Overseas Pvt Ltd (supra), that when three dates had been granted, it would tantamount to adjournments. However, the provisions of Sub-section (2) of Sec.33A of the Act provides for three adjournments, therefore, that would amount to 4 days and 3 adjournments. For ready reference, the observations made by this Court in the case of Regent Overseas Pvt Ltd (supra), are reproduced:

“12. Another aspect of the matter is that by the notice for personal hearing three dates have been fixed and absence of the petitioners on those three dates apepars to have been considered as grant of three adjournments as contemplated under the proviso to sub-section (2) of section 33A of the Act. In this regard, it may be noted that sub-section (2) of section 33A of the Act provides for grant of not more than three adjournments, which would envisage four dates of personal hearing and not three dates, as mentioned in the notice for personal hearing. Therefore, even if by virtue of the dates stated in the notice for personal hearing it were assumed that adjournments were granted, it would amount to grant of two adjournments and not three adjournments, as grant of three adjournments would mean, in all four dates for personal hearing.

13. As discussed hereinabove, in view of the fact that the notice for personal hearing was not served upon the petitioners in accordance with law, no one could remain present for personal hearing on behalf of the petitioners on the dates specified in the notice and the adjudicating authority has proceeded on the footing that three adjournments have been granted and has passed the impugned ex parte order Such order is, therefore, clearly in breach of the principles of natural justice warranting interference by this court in exercise of powers under Article 226 of the Constitution of India.”

9.2 In wake of such submissions, the Order-in-Original is passed against the settled legal position and in breach of principles of natural justice.

9.3 It is not in dispute that the petitioner was not heard before passing of the Assessment Order. It is fundamental proposition of law that other side should be heard before any order is passed. The maxim of Audi Alteram Partem is broad enough to include the rule against bias since a fair hearing is must for it to be unbiased hearing. The essential ingredients of fair hearing is that a person should be served with a proper notice and should be given a right to hearing. 10 For the foregoing reasons, the impugned Order-in-Original dated 31.03.2023 passed under the Finance Act, 1994, as well as the Order-in- Appeal dated 25.06.2024 is hereby quashed and set aside and the matter is remanded back to the Adjudicating Authority to de novo hear the petition and decide the same in accordance with law after affording adequate opportunity of hearing to the petitioner. Such exercise shall be completed within a period of 12 weeks from the date of receipt of copy of this order.

It is clarified that this Court has not gone into merits of the matter. Rule is made absolute to the aforesaid extent. No order as to costs.”

8. As per the provisions of Section 75(4) of the GST Act, the respondents are supposed to grant three opportunities of personal hearing before passing any adverse orders. Hence, the stand remains uncontroverted.

9. Accordingly, the writ petition is allowed. The impugned order is hereby quashed and set aside. The matter is remanded back to the respondent authorities to pass a fresh order within a period of 12 weeks. Rule is made absolute. No order as to costs.”

13. Thus, the impugned order deserves to be quashed and set aside on three grounds: first, the failure of the respondent authorities to intimate the date, time, and venue of personal hearing; second, the passing of a non-speaking order; and third, the failure to afford the petitioner three opportunities of personal hearing as contemplated under Section 75(4) of the CGST Act.

14. Accordingly, the writ petition succeeds. The impugned order is quashed and set aside and the matter is remanded to the jurisdictional State Tax Officer, who shall pass a fresh order after affording the petitioners an opportunity of hearing in accordance with law, within a period of twelve weeks from the date of receipt of the certified copy of this order. Rule is made absolute to the aforesaid extent.

15. It is clarified that since the impugned order has been set aside, the petitioners’ claim for refund along with interest shall remain subject to the fresh order that may be passed by the respondent authority after considering the defense that may be raised by the petitioners in the remanded proceedings.