Personal Hearing Mandatory for Adverse GST Orders: Madras HC

J-Lin Constructions Vs Assistant Commissioner (ST) (FAC) ( Madras High Court)

In a recent judgment, the Madras High Court addressed the necessity of personal hearings under GST laws, emphasizing their mandatory nature even in cases where adverse orders are contemplated without explicit request from the taxpayer.

The case involved J-Lin Constructions, a business engaged in civil work contracts, contesting orders and rectification petitions issued by tax authorities. The primary contention was the denial of a personal hearing during the issuance of orders in original and subsequent rectification orders. The petitioner argued that this denial violated Section 75(4) of GST enactments, which mandates a personal hearing before adverse orders are finalized.

The court noted that despite the taxpayer not explicitly requesting a personal hearing, the law obligates tax authorities to provide one when contemplating adverse actions. It highlighted that the failure to provide such a hearing undermines procedural fairness and could render the orders invalid. The judgment emphasized that compliance with procedural requirements, including the opportunity for personal hearing, is crucial to upholding the principles of natural justice.

The respondent, represented by the Additional Government Pleader, countered that a personal hearing was granted during the rectification stage. However, the court ruled that this did not suffice, as the opportunity for a hearing should have been provided earlier, before the issuance of the original adverse orders.