Section 75 of the CGST Act provides for General provisions relating to determination of tax. Section 75(4) mandates that 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 a person. The said provision ensures that the principles of Natural Justice are adhered to. The principle of “audi alteram partem” meaning “hear the other side” is a fundamental element of natural justice, ensuring fairness and impartiality in legal proceedings. It mandates that all parties involved in a dispute have a chance to present their case before a decision is made. This principle is crucial for ensuring justice is not only done but also seen to be done. The aforesaid provision is beneficial for the assessee in as much as nothing prejudicial could be done by the assessing officer without proper notice & knowledge of the assessee. This is a mandatory requirement of the GST law.
But when certain rights are bestowed upon any person, they come with equivalent obligations and duties. Section 75(5) of the CGST Act mandates that 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. The proviso, however, limits the number of such adjournments to a maximum of three during the assessment proceedings. This implies that after due notice, the assessee shall cooperate with the assessing officer and will deliberately not delay the proceedings.
A plain reading of Section 75(5) indicates that it permits up to three adjournments when sufficient cause is demonstrated. This ceiling ensures that the assessing officer cannot grant further adjournments once three have been provided. The legislative intent behind capping the adjournments is to prevent unnecessary delays that taxpayers might seek to exploit for avoiding or deferring imposition of tax demand or penalties. The lawmakers, in their wisdom, restricted the number of adjournments to three because the assessees wish to prolong the proceedings so as to avoid imposition of demand/ penalty.
Judicial Precedent: The Gujarat High Court’s View
The Gujarat High Court, in Regent Overseas Pvt. Ltd. & others v. Union of India & others 2017 (6) G.S.T.L.15 (Guj) (Date of judgment: 1 March 2017) interpreted the adjournment provision under Section 33A of the Central Excise Act, which is analogous to Section 75(5) of the CGST Act. The Court held that the provision for three adjournments translates to four opportunities for personal hearing since the first hearing does not count as an adjournment. It was observed that if three adjournments are granted, a total of four hearing dates are actually scheduled — the first original hearing date plus three adjourned dates.
This interpretation, extending the logic to Section 75(5) of the CGST Act, suggests that when three adjournments are granted, four effective hearing dates must be provided. This ensures fair opportunity for the assessee to represent their case while balancing the need for quick disposal of cases.
The dispute arose in the said case when by a single consolidated notice dated 9.9.2015, the matter had been fixed for final hearing on three dates, namely, 22.9.2015 or 29.9.2015 or 6.10.2015 to submit that non- appearance on the part of the petitioners pursuant to the said notice was considered as substantial compliance with sub- section (2) of section 33A of the Act. The proviso to section 33A of the Act mandates for grant of not more than three adjournments to a party during the proceeding but in the present case, the adjudicating authority has stated three dates in one notice and has considered the same to amount to three adjournments and, accordingly, has decided the matter ex parte.
The Court after analyzing the facts of the case and the mandate of Section 75(5) of the CGST Act observed thus:
“9. Another aspect of the matter is that by the notice of personal hearing, the adjudicating authority has given a choice of three dates of personal hearing as mentioned hereinabove. In view of the fact that the petitioners or their representatives did not remain present on any of the dates, the adjudicating authority has proceeded further with the matter and has passed the order-in-original ex parte. In this regard, reference may be made to section 33A of the Act, which reads thus:
“33A. Adjudication procedure. – (1) The adjudicating authority shall, in any proceeding under this Chapter or any other provision of this Act, give an opportunity of being heard to a party in a proceeding, if the party so desires.
(2) The Adjudicating authority may, if sufficient cause is shown, at any stage of proceeding referred to in sub-section (1), grant time, from time to time, to the parties or any of them and adjourn the hearing for reasons to be recorded in writing:
Provided that no such adjournment shall be granted more than three times to a party during the proceeding.”
10. Section 33A of the Act provides for giving an opportunity of hearing to a party in a proceeding by the adjudicating authority. Sub-section (2) thereof, provides for granting time to the parties and for adjourning the hearing for reasons to be recorded in writing. The proviso thereto circumscribes the power to grant time conferred under sub-section (2) of section 33A of the Act, by providing that no such adjournment shall be granted more than three times to a party during the proceeding.
11. Thus, by virtue of the provisions of sub-section (2) of section 33A of the Act, when a personal hearing is fixed, it is open to a party to seek time by showing sufficient cause and in such a case, the adjudicating authority may grant time and adjourn the hearing by recording the reasons in writing. However, in view of the proviso thereto not more than three such adjournments can be granted. On a plain reading of sub- section (2) of section 33A of the Act and the proviso thereto, what the same envisages is fixing a date of hearing and in case if a party asks for time and makes out sufficient cause, then to adjourn the hearing. Since the number of such adjournments is limited to three, the hearing would be required to be fixed on each such occasion, and on every occasion when time is sought and sufficient cause is made out, the case would be adjourned to another day. However, the adjudicating authority is required to give one date at a time and record his reasons for granting adjournment on each occasion. It is not permissible for the adjudicating authority to issue one consolidated notice fixing three dates of hearing, whether or not the party asks for time, as has been done in the present case. Thus, apart from the fact that the notice of hearing has not been served in the manner contemplated under section 37C of the Act, the notice itself suffers from a legal infirmity inasmuch as it fixes three dates of hearing at a time, which is not in consonance with the proviso to section 33A of the Act.
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 appears 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 of 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 and 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.
14. For the foregoing reasons, the petition succeeds and is, accordingly, allowed. The impugned order dated 29.1.2016 passed by the Commissioner of Customs and Central Excise, Surat-II (Annexure-A to the petition) is hereby quashed and set aside and the matter is restored to the file of the adjudicating authority to decide the same in accordance with law after affording adequate opportunity of hearing to the petitioners. Rule is made absolute accordingly with no order as to costs.”
It is pertinent that the Government accepted the said judgment and within the next 10 days CBEC, New Delhi issued a binding Circular No.1053/02/2017-C.X., dated 10.03.2017, wherein, in paragraph 14.3, it had been mandated as under:
“Personal hearing: After having given a fair opportunity to the petitioner for replying to the Show Cause Notice, the adjudicting authority may proceed to fix a date and time for personal hearing in the case and request the assessee to appear before him for a personal hearing by himself or through an authorised representative. At least three opportunities of personal hearing should be given with sufficient interval of time so that the petitioner may avail opportunity of being heard. Separate communications should be made to the petitioner for each opportunity of personal hearing. In fact separate letter for each hearing/extension should be issued at sufficient interval. The Adjudicating authority may, if sufficient cause is shown, at any stage of proceeding adjourn the hearing for reasons to be recorded in writing. However, no such adjournment shall be granted more than three times to a petitioner.”
The said case law in Regent Overseas (supra) was followed by the Gujrat High Court in the case of Kachhadiya Vijaybhai Kalubhai vs Union Of India decided recently on 21 March, 2025, theTelangana High Court in the case of M/S. Srinivasa Resorts Ltd. vs Joint Commissioner Of Service Tax on 27 June, 2022 & Madras High Court judgment in the case of M/S. Texwin Impex vs The Assistant Commissioner Of Customs, Chennai decided on 12 July, 2023.
It would be germane to refer to the Allahabad High Court judgment in the case of M/S Avshesh Kumar vs Union Of India And 2 Others decided on 20 May, 2024 wherein following Regent Overseas (supra), the Court observed thus:
“4. Relying on Section 33A of the Central Excise Act, 1994 (hereinafter referred to as the ‘Act’), it has been submitted, it never became open to the respondent-authority to fix three successive dates of hearing, by a single notice, that too within a span of seven days, solely with the object of defeating the purpose and intent of Section 33A of the Act. In any case no order was passed on any of the three dates either granting or refusing adjournment. Without fixing any other date in the proceeding and without issuing any further notice in that regard, the impugned order was passed on 23.03.2023. Thus, the rules of natural justice are described to have been completely violated. Reliance has been placed on a division bench decision of the Gujarat High Court in Regent Overseas P. Ltd. and another v. Union of India and another; 2017 SCC OnLine Guj 2552.”
It would be trite to refer to the recent Delhi High Court division bench judgment in the case of SS ENTERPRISES v. OFFICE OF THE COMMISSIONER CENTRAL TAX DELHI WEST AND ANR in W.P.(C) 5684/2025 decided on May 1, 2025 wherein the Court held that Section 75(5) only permits three adjournments if sufficient cause is shown but does not guarantee three hearings as a matter of right. The Court clarified that the provision is intended to prevent abuse of the process by limiting excessive delays, not to guarantee hearings. As per Section 75(5) the maximum opportunities are four and not three. Thus the phrase, “”Three adjournments” means three postponements and hence four opportunities.
Conclusion: Balancing Natural Justice with Expediency
The cap on adjournments in Section 75(5) strikes a balance between the principles of natural justice and the imperative of quick disposal. While it safeguards the taxpayer’s right to be heard, it also prevents misuse through prolonged delays. This unison of natural justice with efficient adjudication is reflective of a well-structured legislative framework aimed at curbing procedural exploitation. Section 75(5) of the CGST Act represents a harmonious blend of natural justice and quick disposal, ensuring that taxpayers are heard while preventing protracted litigation.
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