In a significant GST-related judgment, the Gujarat High Court has set aside a GST order passed against a taxpayer on the ground that the authorities failed to properly intimate the date and time of personal hearing. The court held that such failure amounts to a clear violation of the principles of natural justice, especially when an adverse order is proposed against the assessee. The ruling reiterates the importance of procedural fairness in GST adjudication and clarifies the responsibilities of tax authorities after issuance of Form GST DRC-01.
Background of the Dispute
The dispute arose after the GST department issued a notice in Form GST DRC-01 to the taxpayer, pointing out certain discrepancies identified during scrutiny. While issuing the notice, the authorities did not specify the date, time, or venue of the personal hearing. Subsequently, without properly intimating these details to the taxpayer, an adverse order was passed on 28 August 2024. The taxpayer challenged the order, and later the appellate authority’s decision dated 6 March 2025 was also contested before the Gujarat High Court.
The petitioner argued that due to the absence of proper hearing details on the GST portal, they were deprived of a meaningful opportunity to submit documents and explanations in response to the show cause notice, which directly affected their right to be heard.
Legal Argument Based on Section 75(4) of the GST Act
Counsel for the petitioner relied heavily on Section 75(4) of the GST Act, which mandates that an opportunity of hearing must be granted where a request is made by the person chargeable with tax or penalty or where any adverse decision is contemplated. It was contended that once proceedings move forward after issuance of DRC-01, the department is required to inform the taxpayer about the date, time, and venue of the personal hearing before passing a final order.
The petitioner further submitted that although the portal reflected reminders and adjournments, it never clearly specified the date and time of personal hearing, making it impossible for the taxpayer to effectively participate in the proceedings.
Stand of the GST Department
On the other hand, the counsel representing the tax department submitted screenshots from the GST portal to show that adequate opportunities were provided to the taxpayer. It was argued that reminders were issued, adjournments were granted, and sufficient time was allowed for filing replies. According to the department, the taxpayer did not actively seek a personal hearing despite being aware of the proceedings displayed on the portal, and therefore the authorities were justified in passing the order.
The department also argued that there is no requirement under law to issue a separate show cause notice or a separate communication solely for intimating the date of personal hearing, as the proceedings are visible on the GST portal.
Observations of the Gujarat High Court
The division bench comprising Justice A.S. Supehia and Justice Pranav Trivedi carefully examined the records and the portal screenshots. The court observed that while issuing DRC-01, it is not mandatory to mention the date, time, and venue of personal hearing because such details may depend on the reply filed by the assessee. However, the court made it clear that once the proceedings progress and before any adverse final order is passed, the taxpayer must be informed about the date, time, and venue of the personal hearing.
The bench noted that although the DRC-01 notice mentioned the last date for submitting a reply, it completely lacked details regarding the personal hearing. Even during subsequent proceedings, the portal did not clearly intimate these crucial details to the petitioner.
The court categorically held that merely uploading notings or reminders on the portal without clearly specifying the personal hearing schedule does not fulfill the requirement of natural justice.
Court’s Ruling and Directions
The Gujarat High Court concluded that the impugned order dated 28 August 2024, along with subsequent orders, was passed in violation of the mandatory procedure and principles of natural justice. As a result, the court quashed and set aside the orders. The adjudicating authority was directed to issue a fresh intimation to the petitioner specifying the date and time of personal hearing and to proceed in accordance with law thereafter.
The bench further clarified that if, after proper intimation, the taxpayer fails to appear for the personal hearing, the adjudicating authority would be at liberty to pass a final order, treating it as a case where the assessee is not interested in availing the opportunity of being heard.
Key Case Details
| Particulars | Details |
|---|---|
| Case Title | Gateway Exim vs. State of Gujarat Through Commissioner of State Tax |
| Case No. | Application No. 7183 of 2025 |
| Court | Gujarat High Court |
| For Petitioner | Priyank P. Lodha |
| Decision | GST order quashed due to non-intimation of personal hearing |
Significance of the Judgment
This judgment serves as an important reminder for GST authorities that procedural compliance is not a mere formality. Clear and timely intimation of personal hearing details is essential to uphold the principles of natural justice, especially when serious civil consequences arise from GST adjudication orders. For taxpayers, the ruling reinforces their right to be heard and highlights the importance of closely monitoring portal communications during GST proceedings.