Mere Written Reply Consideration Cannot Substitute Personal Hearing: Bombay HC

Mere Consideration of Written Reply Cannot Substitute Personal Hearing: GST Order Quashed by Bombay High Court

Summary: The Bombay High Court, in Taiyo Nippon Sanso India Pvt. Ltd. v. Union of India & Ors. (Writ Petition No. 1966 of 2025, decided on 22 April 2026), quashed a GST rectification order passed without granting the petitioner a personal hearing. The petitioner, engaged in manufacturing and selling industrial and medical gases, had sought rectification under Section 161 of the CGST Act and raised an objection regarding overlapping State and Central GST proceedings for the same period. Despite its detailed written submissions, the rectification order was passed without a personal hearing and without addressing the jurisdictional objection. The Court held that this amounted to breach of natural justice and remanded the matter for fresh consideration, with directions for a personal hearing and a reasoned order. The decision reinforces the mandatory nature of the opportunity of hearing contemplated by Section 75(4) of the CGST Act where an adverse decision is contemplated. However, the article distinguishes denial of a hearing from cases where a hearing is duly offered but the taxpayer fails to attend, referring to the Madras High Court’s Bright Steels case. The practical lesson for adjudicating authorities is to communicate and document hearing opportunities, consider specific objections and record their consideration in the order.

Personal Hearing Under GST

The GST law does not leave this to an officer’s discretion. Section 75(4) of the CGST Act says that a personal hearing must be granted whenever a written request is made, or whenever the officer intends to pass an order adverse to the taxpayer. This is not a courtesy — it is a mandatory safeguard built into the GST Act itself. A written reply lets a taxpayer put facts on paper; a personal hearing lets him explain those facts, answer doubts the officer may have, and be heard before a decision that affects his money and his business is finalised. The two are meant to work together, not as substitutes for each other.

Section 75(4) of the CGST Act

“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.”

Two triggers, either one enough on its own: a written request for hearing, or an adverse decision on the cards. Nothing in this sub-section says the hearing can be skipped just because a reply was filed.

The Case

The judgment in question comes from the Bombay High Court, in the case of Taiyo Nippon Sanso India Pvt. Ltd. v. Union of India & Ors. (Writ Petition No. 1966 of 2025, decided on 22 April 2026). The petitioner, a company manufacturing and selling industrial and medical gases, had approached the department seeking rectification of an earlier order under Section 161 of the CGST Act. It filed a detailed rectification application along with supporting documents, specifically pointing out that State GST proceedings for the same period were without jurisdiction, since Central GST authorities had already conducted and concluded an audit covering the same period.

Despite this detailed written submission, the rectification order was passed without granting the company a personal hearing, and without dealing with its objection about the overlapping Central and State proceedings. The Court held that this was a clear breach of natural justice. It quashed the order and sent the matter back for fresh consideration, directing that a fresh show cause notice be issued if needed, followed by a personal hearing, and a reasoned, speaking order — the whole process to be completed within three months. Importantly, the Court kept all contentions of both sides open, meaning the department is free to argue its case again, but only after following the correct procedure this time.

This is not an isolated view. Courts across the country — from Gujarat to Madhya Pradesh to Punjab & Haryana — have repeatedly said the same thing in recent months: ticking “No” in a reply, or the officer’s own belief that the written reply says enough, cannot take away a taxpayer’s statutory right to be heard once an adverse order is contemplated.

But What If the Hearing Was Offered and the Taxpayer Simply Didn’t Show Up?

This is the flip side officers should also know, because it is not the same situation as Taiyo Nippon Sanso, and courts have treated it differently. Suppose a hearing date, time, and mode are duly communicated to the taxpayer through the GST portal, the taxpayer files a written reply to the notice, but does not turn up for the hearing and does not seek an adjournment either. Here the officer has actually discharged the Section 75(4) obligation — a genuine opportunity was extended, not merely assumed. The Madras High Court, in the Bright Steels case (W.P.(MD) Nos. 14395 to 14398 of 2021) took exactly this view: where multiple hearing opportunities were duly granted through proper notice and it was the taxpayer who chose not to avail them, the resulting order could not be said to violate Section 75(4). The safeguard exists to prevent a hearing from being denied — it does not force an officer to keep chasing a taxpayer who has been given a fair chance and has let it pass.

Denial of Hearing vs. Lapsed Opportunity

The difference for an officer to hold onto is this: in Taiyo Nippon Sanso, no personal hearing was communicated at all before the adverse order was passed — that is a denial. In the Bright Steels situation, the hearing was properly communicated on the portal, the taxpayer engaged with the proceedings by filing a reply, but chose not to attend the hearing — that is a lapsed opportunity, not a denial. The order in the second scenario can safely proceed, provided the portal communication, date, and mode of hearing are clearly recorded on file — because if that record is thin or ambiguous, the taxpayer can later claim the notice never reached him, and the officer is back to defending a denial-of-hearing challenge in court.

What Adjudicating Authorities Should Learn

Personal Hearing Cannot Be Replaced by Consideration of Written Reply

Reading a reply carefully and even referring to it in the order does not satisfy Section 75(4). If the outcome is going to be adverse, a personal hearing must be offered and recorded, regardless of how thorough the written submission was.

Specific Objections Must Be Addressed

When a taxpayer raises a specific point — such as overlapping proceedings by two different authorities — the order must deal with it. An order that is silent on a live objection invites quashment, even if the rest of the order is otherwise sound.

Natural Justice Applies to Rectification Proceedings

The obligation to hear the affected party before passing an adverse order applies as much to rectification proceedings as it does to original assessment or demand orders. There is no shortcut route that bypasses natural justice.

Procedural Compliance Can Prevent Repeated Proceedings

The department did not lose on merits here; it lost on procedure. The matter now has to be re-done from scratch, with fresh notice, fresh hearing, and a fresh reasoned order — all within three months. That is time, effort, and departmental credibility spent twice over something a single hearing letter would have avoided.

The Order Should Record Hearing and Consideration of Objections

An order should show, in its own text, that a personal hearing was offered or held, and that specific objections raised by the taxpayer were considered and answered — not simply that “the reply has been perused.

Maintain a Clear Record of Hearing Communication

If a hearing date was uploaded on the portal and the taxpayer chose not to attend despite filing a reply, that record — the notice, the date, the mode — is the officer’s shield. Without it, a “taxpayer didn’t show up” order looks exactly like a “taxpayer was never told” order to a reviewing court.

Key Reminder for Proper Officers

For Proper Officers this case is a useful reminder ahead of passing any order under Sections 73, 74, 74A, or 161 — when overlapping jurisdiction issues, audit conflicts, or detailed written objections are on file, a personal hearing is not a formality to be ticked off; it is the safeguard that keeps an otherwise good order from being struck down on a technicality that was entirely avoidable.