Case Law Details
Gurukrupa Tradelink Private Limited Vs State of Gujarat & Anr. (Gujarat High Court)
Mandatory Personal Hearing under Section 75(4) Cannot be Waived even if not opted for personal Hearing by Assessee: Gujarat High Court
The Gujarat High Court in Shree Gurukrupa Tradelink Private Limited vs State of Gujarat & Anr. held that the statutory mandate of granting personal hearing under Section 75(4) of the GST Act cannot be bypassed merely because the assessee selected the “No Personal Hearing” option while replying to the show cause notice. The petitioner had replied to Form GST DRC-01 and opted against personal hearing, after which only one hearing date was fixed. Upon non-appearance, the authority passed an adverse order without granting further opportunities. The Court observed that the adjudicating authority had not accepted the petitioner’s reply and therefore ought to have provided adequate hearing opportunities before deciding the matter. Emphasizing the principles of natural justice and the doctrine of audi alteram partem, the Court ruled that procedural safeguards under Section 75(4) are mandatory. Consequently, the impugned order was quashed and the matter remanded for fresh adjudication within 12 weeks after granting proper hearing opportunities.
Facts:
Shree Gurukrupa Tradelink Private Limited (“the Petitioner”) was issued a show cause notice in Form GST DRC-01 dated October 16, 2023, to which it filed a reply in Form GST DRC-06 dated October 21, 2023, opting for “No” in respect of personal hearing.
The State of Gujarat & Anr. (“the Respondent”) fixed a single date of hearing on November 6, 2023, and upon the Petitioner not remaining present, proceeded to pass the impugned order on that basis.
The Petitioner contended that only one opportunity of hearing was granted and the order was passed in violation of Section 75(4) of the CGST Act and principles of natural justice.
The Respondent contended that the Petitioner had itself opted for “no personal hearing” in its reply and therefore cannot complain of lack of hearing, and that an opportunity was nonetheless provided which the Petitioner failed to avail.
Aggrieved by the passing of the order without granting adequate opportunities of hearing as mandated under law, the Petitioner approached the Hon’ble High Court.
Issue:
Whether the option of no personal hearing exercised by the assessee can override the mandatory requirement of granting personal hearing under Section 75(4) of the GST Act before passing an adverse order?
Held:
The Hon’ble Gujarat High Court in R/Special Civil Application No. 6483 of 2024 held as under:
- Observed that, the Petitioner has been granted the opportunity of hearing for one time only.
- Noted that, the show cause notice was issued and the petitioner opted for no personal hearing, yet one date of hearing was fixed and the order was passed upon non-appearance.
- Observed that, it was categorically accepted by the Respondent that three opportunities of personal hearing as envisaged under Section 75(4) were not provided.
- Held that, the option of no personal hearing taken by the petitioner, cannot override the effect of mandate given by the statutory provision in Section 75(4) of the Act.
- Noted that, the authority had not accepted the submissions made in Form GST DRC-06 and therefore ought not to have decided the matter on the very first date of hearing.
- Observed that, it was incumbent upon the authority to follow the mandate of Section 75(4) and grant further opportunity of hearing.
- Noted that, the principles of natural justice require that the other side should be heard before any order is passed, including proper notice and opportunity of hearing.
- Held that, the impugned order was passed in breach of settled legal position and principles of natural justice and directed that, the impugned order is quashed and set aside and the matter is remanded back to the adjudicating authority to pass a fresh order after affording adequate opportunity of hearing within 12 weeks.
Our Comments:
The Court in its earlier decision in M/s. Yadav Trailor Transport Co. vs Union of India & Ors. [2025:GUJHC:63205-DB], wherein it was held that absence of proper opportunity of hearing renders the order violative of principles of natural justice, particularly emphasizing that it is fundamental proposition of law that other side should be heard before any order is passed and invoking the maxim audi alteram partem.
The reasoning in the present case aligns with the above precedent in holding that procedural compliance relating to opportunity of hearing is mandatory and cannot be diluted even where the assessee appears to waive such right.
Relevant Provision:
Section 75(4) of the GST Act, 2017
“75. General provisions relating to determination of tax.-
(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.”
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1 Rule. Since the issue involved in the present writ petition is in narrow compass, the matter is taken up for final hearing and final disposal today.
2 On 13.03.2026, this Court had passed the following order:
“1. Today, learned AGP has tendered the documents of the proceedings. The same are ordered to be taken on record.
2. On perusal of the said documents, it appears that the petitioner has been afforded opportunities of hearing however, he has chosen not to remain present. It is also noticed that the incorrect statement has been made in the writ petition and hence, the same is required to be dismissed with exemplary cost however, in order to give one more chance to the petitioner, the matter is kept on 18.03.2026. A copy of the documents of the proceedings to be supplied to the learned advocate for the petitioner for taking appropriate instructions.”
3. However, on perusal of the documents which were provided before this Court, i.e. the Rojnama recording the proceedings, we find that the petitioner has been granted the opportunity of hearing for one time only.
3.1 However, learned AGP Ms.Pooja Ashar has submitted that looking to the order sheet, the show-cause notice in Form GST DRC-01 was issued on 16.10.2023 and the date of hearing was fixed on 06.11.2023 at 11 a.m. While replying to the show-cause notice by filing Form GST DRC-06 dated 21.10.2023, the petitioner has taken option of personal hearing as “No”. Despite such option taken by the petitioner, the authority has though it fit to keep one date of personal hearing on 06.11.2023 and when the petitioner did not remain present on that date, the impugned order is passed.
3.2 However, it was categorically accepted by learned AGP Ms.Pooja Ashar that three personal hearing as envisaged under the provisions of Section 75(4) of the Gujarat Goods and Service Tax Act, 2017 (for short “the GST Act”) were not provided provided to the petitioner. The stand taken by the learned Assistant Government Pleader cannot be countenanced, inasmuch as, the option of no personal hearing taken by the petitioner, cannot override the effect of mandate given by the statutory provision in Section 75(4) of the Act.
3.3 In the instant case, the authority had not accepted the submissions made by the petitioner in the reply filed in Form GST DRC-06. If that was the case, the authority ought not to have decided the matter on the very first date of personal hearing. It was incumbent upon the authority to follow the mandate of Section 75(4) of the 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.”
4. As per the provisions of Section 75(4) of the Act, the respondents are supposed to grant three opportunities of personal hearing before passing any adverse orders. Hence, the stand remains uncontroverted.
5. 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.
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