An order passed after denying an adjournment requested on valid medical grounds is a violation of the principles of natural justice and is not legally sustainable.

Issue

Is an adjudication order confirming a tax demand legally valid if it is passed without granting an adjournment sought by the taxpayer on genuine medical grounds, thereby denying them an effective opportunity to be heard?

Facts

The GST department issued a show-cause notice to the assessee, proposing a tax demand and fixing a date for a personal hearing.
The assessee was unable to attend the scheduled hearing. The reason provided was that the proprietor of the firm was undergoing medical treatment. This effectively served as a request for an adjournment.
The Adjudicating Authority did not grant the adjournment and proceeded to pass the final order, confirming the demand against the assessee.
The assessee’s subsequent appeal against this order was rejected by the appellate authority on the technical ground of being filed late (delay).

Decision

The High Court ruled in favour of the assessee.

The court found that the order passed by the Adjudicating Authority was a non-speaking order (i.e., it lacked proper reasoning) and, more significantly, was passed in breach of the principles of natural justice.
By refusing to grant an adjournment for a valid and documented reason like medical treatment, the authority had effectively denied the assessee the opportunity of being heard, which is a right protected under Section 75(4) of the GST Act.
The court set aside the impugned orders (both the original adjudication order and the appellate order that dismissed the appeal on delay) and remanded the matter back to the Adjudicating Authority with a direction to pass a fresh order after giving the assessee a proper hearing.

Key Takeways

The Right to a Fair Hearing is Fundamental: The opportunity to be heard is a cornerstone of natural justice. This right includes the ability to seek a reasonable adjournment on genuine grounds, such as a medical emergency.
Authorities Must Act Judiciously, Not Mechanically: Adjudicating authorities are expected to apply their minds to the facts and circumstances of each case. Mechanically passing an order without considering a legitimate request for an adjournment is an arbitrary exercise of power.
Orders Must Be “Speaking”: A valid quasi-judicial order must contain clear reasons for its conclusions. An order passed without reasoning is considered a “non-speaking order” and is liable to be set aside for that reason alone.
Substance Prevails Over Procedural Lapses: In this case, the court looked past the procedural issue of the delayed appeal to address the more fundamental and serious flaw of the denial of natural justice in the original order itself.

HIGH COURT OF GUJARAT

Jay Jalaram Mandap Decorators

Deputy Commissioner

BHARGAV D. KARIA and Pranav Trivedi, JJ.

R/SPECIAL CIVIL APPL. NO. 8551 of 2025

AUGUST 22, 2025

Dhaval D. Vyas, Ld. Sr. Adv. and Pratik K Khubchandani for the Petitioner. Utkarsh Sharma, AGP for the Respondent.

ORDER

Bhargav D. Karia, J.- Heard learned Senior Advocate Mr.Dhaval D. Vyas with learned advocate Mr.Dipen Sankhesara for learned advocate Mr.Pratik K. Khubchandani for the petitioner and learned Assistant Government Pleader Mr.Utkarsh Sharma for the respondents.

2. Learned advocate Mr.Utkarsh Sharma for the respondents has tendered the Affidavit-in-Reply on behalf of the respondent Nos.2 and 3 tendering unconditional apology contained in paragraph No.9 thereof, along with Standard Operating Process (for short ‘the SOP’) issued on 21.08.2025 by the Additional State Tax Commissioner (Administration), State of Gujarat addressed to the Additional State Tax Commissioner (Audit) and Joint State Tax Commissioner, Division 1 to 12 for the purpose of adjudication of the proceedings under Section 73/74/74A/122 of the Gujarat Goods and Services Tax Act, 2017. The same is ordered to be taken on record.

3. By this petition under Articles 226 and 227 of the Constitution of India, the petitioner has prayed to quash and set aside the order dated 09.03.2024 passed by the State Tax Officer, Ghatak 93 (Rajkot), Range-23, Division-10, Gujarat and order dated 24.04.2025 passed by the Deputy Commissioner of State Tax, Appeal Division-10, Rajkot.

4. The brief facts of the case are as under :

4.1. The respondent No.2-State Tax Officer, Ghatak 93 (Rajkot), Range-23, Division-10, Gujarat issued a show-cause notice dated 28.12.2023 under Section 73 of the Gujarat Goods and Services Tax Act, 2017 (for short ‘the GST Act’) proposing to raise demand of Rs.26,98,158/- for the period from April, 2018 to March, 2019.

4.2. It is the case of the petitioner that the proprietor of the petitioner firm-Shri Manish Hashmukhbhai Thakkar was not well and was undergoing medical treatment since 19.12.2023 and therefore, he could not attend the hearing on 18.01.2024 fixed by the respondent No.2 as intimated in the show-cause notice.

4.3. It is the case of the petitioner that the impugned order dated 9^th arch, 2024 was passed by the Adjudicating Authority without granting any further adjournments of hearing after 18.01.2024.

4.4. It is also the case of the petitioner that none of the notices for hearing after 18.01.2024 was received by the petitioner in spite of the fact that the petitioner by application dated 29.01.2024 requested the respondent No.2 to grant further period of fifteen days in addition to the thirty days’ time specified in the show-cause notice to file reply so as to gather necessary documents and to engage the professional advisor to prepare the reply.

4.5. It is also pertinent to note that in response to the request for adjournment, the respondent No.2 neither accepted nor rejected such request and straight away the Order-in-Original dated 9^th March, 2024 was passed resulting into breach of principles of natural justice. The petitioner could not file the Appeal against such order due to the ill health of the proprietor of the petitioner firm. The petitioner thereafter could file the Appeal in month of March, 2025 after payment of the pre-deposit of Rs.1,29,758/- with an application to condone the delay along with supporting documents containing requisite medical records of the proprietor of the petitioner firm.

4.6. After hearing the petitioner on 01.04.2025 and adjourning the matter on 07.04.2025 to provide the information, the respondent No.1 rejected the Appeal on ground of delay by order dated 24.04.2025.

5. Learned Senior Advocate Mr.Dhaval Vyas for the petitioner submitted that the impugned is Order-in-Original is a non-speaking order without considering the request made by the petitioner to grant adjournment. Learned advocate Mr.Dhaval Vyas invited the attention of the Court that in the formate of the Orderin-Original, the respondent No.2 has copied and pasted the adjournment application filed by the petitioner under each head of disallowance for not agreeing with the tax payer as a specimen which reads as under :

“Reconciliation of GSTR-01 with GSTR-3B:

The outward supplies turnover declared in GSTR-01 is greater than net outward supplies information furnished in GSTR-3B. This amount is therefore determined to be taxed as under declared outward supplies as follows:

S.No	Issue	SGST	CGST	IGST	CESS	Total
1	2	3	4	5	6	7
1	Tax on Outward supplies declared in GSTR-01 for FY	2116566	2116566	0	0	4233132
2	Less tax on Outward suplies arrived in GSTR-3B at box 3.1 A+3.	1790867	1790867	0	0	3581734
3	Difference (S.No.1-S.No.2)	325699	325699	0	0	651398

Response of the tax payer:

The tax payer has ‘Not agreed’ for the following amount in the SCN.

SGST: 325699 CGST:325699 IGST:0 CESS:0

The reasons cited by the tax payer for disagreeing/partially disagreeing are:

1. Other Reasons Mentioned by Tax Payer:

SGST:325699 CGST:325699 IGST:0 CESS:0

Reasons:

-Chartered Accountant is out of station and come in 08.02.2024 and CA and I am residing at Surat. We are coming and personally meet on or before 15.02.2024 with reply. Considering the complexity of the matter and the importance of providing a detailed response, I kindly request an adjournment of 15 days to facilitate the collection of documents and engage a suitable Chartered Accountant for assistance. I believe that this extension will be in the interest of both the taxpayer and the Income Tax Department, as it will contribute to a more informed and accurate assessment.

Observations and conclusion of the assessing authority:

Not Agreed with Tax Payer

Specific reasons entered

WE HAVE ARRANGED PERSONAL HEARING FOR THIS CASE ON 18.01.2024, NO ONE WAS PRESENT ON SCHEDULED TIME AND DATE. WE EVEN CONSIDER YOUR REPLY IN FORM DRC 06, TILL 15.02.2024 NO ADDITIONAL REPLY PROVIDED BY YOU. EVEN AFTER GIVING YOU SUFFICIENT TIME TO REPRESENT YOUR CASE, YOU HAVE NOT FILLED PROPER REPLY WITH DOCUMENTARY EVIDENCES. THUS, IN VIEW OF INSUFFICIENT PROOFS, THIS DEMAND ORDER IS BEING ISSUED TO YOU.”

6. The above “specific reason entered” is reproduced and copied under each head of the disallowance by the respondent No. 2. Thus, it is apparent that the respondent No.2 without application of mind and mechanically has passed the order and therefore, the author of the order was joined in personal capacity by allowing the draft amendment tendered by the petitioner vide order dated 1st August, 2025.

7. The respondent Nos. 2 and 3 have filed a detailed affidavit-in-reply with the following averments :

“7. It is submitted that the abovementioned chronology of events is only cited with a view to bring to the Hon’ble Court’s kind attention that at no point of time, the adjudicating authority has rushed into the proceedings and ample opportunity was granted, however, the petitioner or their representatives have neither remained present nor have filed a reply and therefore, ultimately the adjudication had taken place. It appears that the petitioner had a peculiar difficulty which was raised as a ground in the appeal, however, the same was not cited at the time of adjudication of the SCN, or else the adjudicating authority would have considered the same. It is further submitted that the order on the face may appear to be brief but the three issues raised have been adjudicated and the reasoning is brief in view of the fact that the petitioner had not participated in the adjudication and therefore, the order has been passed based on the material available.

8. It is further submitted that at the relevant point of time the software also did not support in-depth reasoning, however, now there is upgradation and improvement in the software also and orders are passed with proper detailed reasoning.

9. I again tender unconditional apology for the impression created on account of my mistake that the principles of natural justice were breached or the order was not a properly reasoned order. I assure that in future I will take utmost care while passing any order and will ensure that there is no breach of principles of natural justice and the orders passed take into consideration all the material as required for proper adjudication of the issue on hand.

10. It is further submitted to resolve the issue, the higher authorities framed an SOP (Standard Operating Process) and all formations will duly follow the same so that the adjudication and orders are only passed after fulfilling all requirements. A copy of the SOP is annexed hereto and marked as ANNEXURE R1 to this reply.”

8. In view of the above averments along with the SOP placed on record at Annexure-R1, we are refraining from passing any further order as the respondents have taken care to see that the proper reasoned orders are passed by the Adjudicating Authority while exercising the jurisdiction under the GST Act. We hope that the Adjudicating Authority and the Appellate Authority shall scrupulously adhere to the SOP placed on record at Annexure R-1 (page Nos. 96 to 106).

9. So far as the facts of the case are concerned, as the impugned order is a nonspeaking order as well as the same is in breach of the principles of natural justice as no opportunity is given to the petitioner as provided in Section 75(4) of the GST Act, the same is hereby required to be quashed and set aside. Therefore, both the orders i.e. Orderin-Original dated 9^th March, 2024 as well as the Appellate Order dated 24^th April, 2025 are hereby quashed and set aside and the matter is remanded back to the respondent No.2 to pass a fresh de-novo order after giving an opportunity of hearing to the petitioner so as to enable the petitioner to file reply to the show-cause notice and personal hearing, if sought for by the petitioner. Such exercise shall be completed within a period of twelve weeks from the date of receipt of the copy of this order.

10. It is clarified that we have not gone into the merits of the matter and the impugned orders are quashed and set aside only on the ground of breach of principles of natural justice.

11. The petition is accordingly disposed of.

Notice is discharged.