Gujarat High Court Quashes GST Orders For Failure To Intimate Personal Hearing; Says Assessee Must Be Notified Before Final Order

The Gujarat High Court on Wednesday (December 3) quashed order issued to entity for failing to intimate about personal hearing, which had claimed that after notice of GST DRC-01 was issued to it, the authority did not intimate the date and time of personal hearing which was against principles of natural justice. 

In doing so the court said while issuing DRC-01 it would not be mandatory to incorporate the date and time of personal hearing; however once subsequent proceedings progress, but before the final order is passed, the assessee must be intimated the date and time of personal hearing. 

The counsel for petitioner referred to Section 75(4) GST Act and submitted that after issuance of notice of the form GST DRC-01, the respondents did not intimate the date place and time of personal hearing and passed the impugned order. The petitioner challenged the order dated 28-8-2024 as well as subsequent orders of the appellate authority dated 6-3-2025. 

For context, Form DRC-01 is a notice issued to the assessee on the discrepancies identified during scrutiny. 

The petitioner's counsel argued that as per Section 75(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.

It was submitted that though details about the personal hearing i.e. date, time and venue, are required to be specified the respondents in the GST portal did not specify such details and hence the petitioner was unable to upload necessary documents and also their explanation to show cause notice.

It was submitted that for want of details as mentioned in DRC-01, there is a gross violation of principle of natural justice as no personal hearing has been given by adjudicating authority while was the order in original. 

It was submitted that if the writ petition is allowed on this short ground the other contentions may be kept open and the respondent maybe directed to consider the same while giving petitioner personal hearing. 

The counsel for the authority pointed to the screenshot of portal and also the notings and submitted that in fact despite having been granted sufficient opportunity on three occasions, the petitioner did not come forward asking for personal hearing or intimating date for personal hearing, the authorities were constrained to pass the orders. 

She submitted that once the proceedings are notified in the portal, the assessee has to verify the subsequent dates as well as notings and the respondent assessing officer is not required to issue a separate show cause notice intimating the date of personal hearing. 

A division bench of Justice AS Supehia and Justice Pranav Trivedi in its order dictated:

"It is the aforesaid mentioned established fact about issuance of notice under DRC-01 to the petitioner on May 21, 2024 is not in dispute...Thus the respondents while issuing the notice DRC-01 in fact have incorporated the details of personal hearing which are required to be intimated which includes date by which reply is to be submitted i.e., June 21, 2024, date of personal, time of personal and venue where hearing will be held. Except the date of reply all the details of other three heads are missing". 

The court said that it appeared that thereafter on the portal, the proceedings were intimated and the screenshot of the portal reflects about the details of Show Cause Notice of DRC-01, the reminder on July 3, 2024, adjournment on Aug 24, 2024 and time to file reply was August 27, 2024.

The court also referred to a note on the portal and said:

"Bare perusal of the note would intimate that infact the petitioner was neither conveyed about date and time of personal hearing, and venue as mentioned herein above. Though we may at this stage mention that at the time of issuing DRC-01, it would not be mandatory to incorporate date of personal hearing, time and venue since it would depend upon reply filed by assessee. However when subsequent proceedings are initiated, and in the portal, before passing any adverse orders, the date venue and time of personal hearing are required to be specified"

"However the question would still remain whether respondents are required to intimate venue time and date to assessee or not. We are of the considered opinion that moment aforesaid details of personal hearings are incorporated in DRC-01, when subsequent proceedings as and when progress, before the final order is passed against assessee, he is required to be intimated date and time of the hearing. We further clarify that respondent are not required to issue show cause notice but are required to intimate the date, time and venue of personal hearing. In the present matter since the aforesaid procedure is violated and no intimation of date, time is accorded to the petitioner, the impugned order dated August 28, 2024 and further orders...are required to be quashed and set aside," the bench added. 

At this stage the counsel for the authority submitted that so far as venue is concerned, the "adjudicating authority always specifies the designation and the venue of personal hearing".

Granting relief the court directed the adjudicating authority to "intimate" the date and time to petitioner so that he can appear personally.

"We further clarify that in case despite intimation to petitioner about date and time he fails to appear it will be open to adjudicating auth to pass final order as it will be deemed to be construed that petitioner is not interested in personal hearing," the bench added. 

The plea was allowed. 

Case title: GATEWAY EXIM v/s STATE OF GUJARAT THROUGH COMMISSIONER OF STATE TAX & ORS.

R/SCA/7183/2025