Adjudication Orders Passed Under Section 74 Without Granting

Adjudication Orders Passed Under Section 74 Without Granting a Mandatory Personal Hearing Are Legally Void

Issue

Whether the Revenue authorities can pass an adverse assessment order under Section 74 without providing a personal hearing, and whether the taxpayer’s failure to file a written reply waives the statutory requirement of a mandatory hearing.

Facts

The petitioner is a registered assessee under the GST regime for the tax period 2017-18.
The Revenue issued a Show Cause Notice (SCN) under Section 74 alleging fraud or short payment, which required the petitioner to file a written reply by a specific date.
In the columns designated for the date, time, and venue of a personal hearing, the SCN explicitly recorded “NA” (Not Applicable).
The petitioner did not file a written response to the SCN.
The adjudicating authority proceeded to pass a final assessment order demanding tax, interest, and penalty without scheduling or granting any personal hearing.
The petitioner challenged the final order via a writ petition, citing a breach of natural justice and the non-compliance of mandatory statutory provisions.

Decision

The High Court set aside the impugned adjudication order and remanded the matter back to the authorities.
The Court noted that the SCN itself clearly demonstrated that the columns for personal hearing particulars were marked as not applicable, proving no opportunity was offered.
It was held that the statutory scheme under Section 75(4) strictly obligates the Revenue to provide an opportunity of personal hearing before contemplating any adverse decision against a taxpayer.
The Court flatly rejected the Revenue’s argument that a personal hearing becomes unnecessary if the taxpayer fails to file a written reply.
The Court emphasized that a personal hearing remains completely mandatory, as the assessee could still produce relevant records or submit oral/written arguments during the hearing itself.
The Revenue was granted liberty to proceed afresh in accordance with the law, strictly conditional upon providing a proper personal hearing to the petitioner.

Key Takeaways

Personal Hearing is Mandatorily Required: Under Section 75(4) of the CGST Act, an opportunity of personal hearing is an absolute statutory mandate whenever an adverse order or an unfavorable tax demand is contemplated against a person.

Written Reply Failure Does Not Waive Hearing: A taxpayer’s silence or failure to file a written response to an SCN does not give the Revenue a license to skip the personal hearing. The right to a physical or digital hearing remains independent and intact.

“NA” in SCN Vitiates the Order: Marking personal hearing details as “Not Applicable” or blank in a Show Cause Notice constitutes a fatal violation of the principles of natural justice, rendering any subsequent demand order legally unsustainable.

HIGH COURT OF PUNJAB & HARYANA

Parv Alloys & Metals

Union of India^*

Deepak Sibal and Rohit Kapoor, JJ.

CWP No.13039 OF 2026

APRIL 29, 2026

Mukul Singla, Adv. for the Petitioner. Saurabh Kapoor, Addl. A.G. for the Respondent.

ORDER

Deepak Sibal, J. – Through the instant petition, challenge is made to the adjudication order dated 19.05.2023 (Annexure P-3) on the ground that prior to issuance of such order no opportunity of personal hearing was offered to the petitioner which not only violates the principles of natural justice but also contravenes Section 75(4) of the Central Goods and Services Tax Act, 2017 (for short, ‘the 2017 Act’).

2. Briefly noticed, the facts are that a show cause notice dated 03.02.2023, pertaining to the financial year 2017-18, was issued to the petitioner by the respondent-authorities under Section 74 of the 2017 Act, granting an opportunity to the petitioner to respond in writing to the allegations made therein. However, no date, time or venue for the grant of personal hearing was mentioned therein. In response to the said show cause notice, the petitioner did not file any written response. Thereafter, the respondent-authorities passed the adjudication order dated 19.05.2023 requiring the petitioner to deposit the tax demanded through it. It is in these circumstances that the petitioner has knocked the doors of this Court for the aforesaid relief.

3. Learned counsel for the parties have been heard and with their able assistance, the records of the case have also been perused.

4. Show cause notice dated 03.02.2023 issued to the petitioner by the respondent – GST authorities, pertaining to the financial year 2017-18 is reproduced below for ready reference:-

“Reference No.ZD030223002234C

GSTIN/ID: 03AATFP6304K1Z0

Name: Parv Alloys & Metals

Address: Amloh Road, Near Bhambari Mill, Mandi Gobindgarh, Fatehgarh Sahib, Punjab, 147301

Tax Period: JUL 2017 – MAR 2018

ARN-NA

(Voluntary payment intimation details, if applicable)

Act/Rules Provisions:

PGST/CGST ACT, 2017 Section 74 read with Rule with 100(2) and 142(1)

Show Cause Notice under Section 74

It has come to my notice that tax due has not been paid or short paid or refund has been released erroneously or input tax credit has been wrongly availed or utilized by you or the amount paid by you through the above referred application for intimation of voluntary payment for the reasons and other details mentioned in annexure for the aforesaid tax period.

Therefore, you are directed to furnish a reply alongwith supporting documents as evidence in support of your claim by the date mentioned in table below.

You may appear before the undersinged or personnel hearing either in person or through authorized representative for representing your case on the date, time and venue, if mentioned in table below.

Please note that besides tax, you are also liable to pay interest and penalty in accordance with the provisions of the Act.

Please also note that if you make payment of tax stated above along with up to date interest and penalty @ 25% of tax within 30 days of the communication of this notice, then proceeding may be deemed to have concluded.

Sr. No.	Description	Particulars
1	Section under which show cause notice/statement is issued	74
2	Date by which reply has to be submitted	02/03/2023
3	Date of personal hearing	NA
4	Time of personal hearing	NA
5	Venue where personal hearing will be held	NA

Demands Details:-

Sr. No.	Tax Rate (%)	Turnover	Tax Period		Act	POS (Place of Supply)	Tax	Interest	Penalty	Fee	Others	Total
Sr. No.	Tax Rate (%)	Turnover	From	To	Act	POS (Place of Supply)	Tax	Interest	Penalty	Fee	Others	Total
1	2	3	4	5	6	7	8	9	10	11	12	13
1	9	0.00	July 2017	March 2018	CGST	NA	74,63,352.00	0.00	0.00	0.00	0.00	74,63,352.00
2	9	0.00	July 2017	March 2018	SGST	NA	74,63,352.00	0.00	0.00	0.00	0.00	74,63,352.00
Total							1,49,26,704.00	0.00	0.00	0.00	0.00	1,49,26,704.00

Signature

Name: Aman Gupta

Designation: Assistant Commissioner

Jurisdiction: Fatehgarh Sahib

Ludhiana Punjab.”

5. A perusal of the afore-referred show cause notice dated 03.02.2023 clearly reveals that against the column of date, time and venue for personal hearing “NA” or not applicable finds mentioned.

6. At this stage, Section 75(4) of the 2017 Act needs to be referred to. The same reads as under:-

“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.”

7. A perusal of the afore-quoted provision leaves no room for doubt that before any adverse decision is even contemplated against an assessee under the 2017 Act, the respondent-revenue is under a statutory obligation to provide to the assessee an opportunity of hearing which, admittedly, in the case in hand, has not been done.

8. The submission raised by the learned State counsel that since to the show cause notice, the petitioner did not file a written response, no opportunity of hearing was required to be granted to the petitioner is required to be considered only to be rejected because under Section 75(4) of the 2017 Act, an assessee is statutorily entitled to be granted an opportunity of hearing before any adverse decision is even contemplated against him. Further, in the absence of a written response, if the petitioner had been granted an opportunity of hearing, it could, at the time of such hearing, produce its original record in the form of account books, ledgers etc. and/or file written arguments in defence and make an attempt to satisfy the Assessing Officer to withdraw the show cause notice served upon him.

9. In the light of the above discussion, the present petition is accepted, resulting in the setting aside of the impugned adjudication order dated 19.05.2023 (Annexure P-3). However, liberty is granted to the respondent-revenue to proceed against the petitioner but only after following the provisions of law including Section 75(4) of the 2017 Act.

10. No costs.