Assessment Order Passed Without Granting Requested Personal

Assessment Order Passed Without Granting Requested Personal Hearing Violates Section 75(4) and Is Void

Issue

Whether an assessment order confirming tax demands under Section 75 can be sustained when the taxpayer’s explicit request for a personal hearing was denied by the department.

Facts

The proceedings pertain to the assessment years 2017–18 through 2022–23 under the GST law.
The Revenue issued a composite Show Cause Notice (SCN) in Form GST DRC-01, alleging discrepancies in the petitioner’s tax returns.
The petitioner submitted a detailed written reply to the SCN and explicitly requested an opportunity for a personal hearing before any final order was passed.
After a significant time gap, the adjudicating authority passed the impugned order and raised a tax demand in Form GST DRC-07 without extending an opportunity of personal hearing.
The petitioner filed a writ petition before the High Court, asserting that the order breached the principles of natural justice and violated the statutory requirement under Section 75(4).
The Revenue admitted that no personal hearing was granted to the petitioner prior to passing the final demand order.

Decision

The failure to grant a personal hearing despite a specific request violates the principles of natural justice and breaches the mandatory statutory requirement under Section 75(4).
The lack of a personal hearing vitiates the entire decision-making process.
The impugned assessment order and consequential demand in Form GST DRC-07 were set aside.
The matter was remanded with directions to afford a personal hearing to the petitioner before an officer other than the officer who issued the SCN, followed by passing a fresh order in accordance with law.
No opinion was expressed on the substantive merits of the tax demand.
The decision was rendered in favour of the assessee/remanded.

Key Takeaways

Mandatory Statutory Pre-condition: Section 75(4) makes a personal hearing mandatory whenever an adverse order is contemplated or a specific request is made by the taxpayer.
Vitiation of Adjudication: Failure to provide a requested personal hearing is a fundamental procedural lapse that invalidates the resulting assessment order without needing to examine the underlying merits.
Bias Protection on Remand: To ensure fair re-adjudication, courts may direct that post-remand hearings be conducted by an independent officer other than the authority that issued the original Show Cause Notice.

HIGH COURT OF MADHYA PRADESH

Shreenath Logistics

State of Madhya Pradesh

Anand Pathak and B.P. SHARMA, JJ.

WRIT PETITION No. 17605 of 2026

JUNE 16, 2026

Sapan Usrethe, Adv. for the Petitioner. Abhijit Awasthi, Dy. Adv. General for the Respondent.

ORDER

B. P. Sharma, J. – Present petition is preferred by petitioner under Article 226 of the Constitution of India seeking following reliefs :-

“i.

To issue a writ of certiorari or other appropriate writ, order or direction to Quash the order dated 25.03.2026 (Annexure P – 6) passed by respondent no.4 as it was passed without giving any reasons and proper opportunity of hearing and declare the same to be illegal, arbitrary, unauthorized by law, violative of natural justice, and is liable to be quashed.

ii.

To issue a writ of certiorari or other appropriate writ, order or direction to Quash the Show Cause Notice dated 16.05.2024 (Annexure P – 1) as same is being issued by respondent no.3 without following the mandatory procedure and was issued for multiple years which is not permissible.

iii.

Pass such other and further order as this Hon’ble Court may deem just and proper in the facts and circumstances of the case.”

2. As per the averments made in the petition, a composite show cause notice in Form DRC-01 dated 16.05.2024 for the financial years 201718 to 2022-23 was issued to the petitioner by respondent No.3 alleging discrepancies in the returns filed by the petitioner. In response thereto, the petitioner duly submitted a detailed reply on 05.10.2024 raising various objections and furnishing clarifications on the merits of the case before respondent No.3. However, after a lapse of approximately 17 months, respondent No.4, who allegedly had no jurisdiction over the petitioner, passed the impugned order dated 25.03.2026 and issued Form DRC-07, creating a tax demand of Rs.2,58,72,212/-, interest of Rs.1,66,59,753/-, and penalty of Rs.3,75,000/-, aggregating to Rs.4,29,06,965/-. The said order was passed without considering the reply submitted by the petitioner and without affording any opportunity of personal hearing, thereby violating the principles of natural justice. Hence, the present petition.

3. Learned counsel for the petitioner submitted that the impugned order has been passed without affording any opportunity of personal hearing to the petitioner whereas the petitioner while submitting the reply (Annexure-P/5) had specifically prayed for an opportunity of personal hearing before passing final order in the matter. It is further submitted that the final order was passed after an inordinate delay of about 18 months from the date of filing of the reply.

4. Learned counsel further submitted that the action of the respondents in issuing a composite/block show cause notice covering multiple financial years is impermissible in law and that various High Courts have consistently held that a block show cause notice cannot be issued under the GST regime. It is also submitted that the impugned order dated 25.03.2026 has been passed by a non-jurisdictional officer who had no authority over the petitioner.

5. Learned counsel for the petitioner further submitted that, in similar circumstances, Division Bench of High Court of M.P. Bench at Gwalior vide order dated 22.01.2024 passed in W.P. No.15923 of 2023 IJM Concrete Products (P.) Ltd. v. State of M.P. [2024] 102 GST 411/82 GSTL 238 (Madhya Pradesh) and connected matters, held that an opportunity of hearing is mandatory before passing any final adverse order. Learned counsel for petitioner also submitted that Section 75(4) of the GST Act specifically mandates grant of an opportunity of hearing wherever an adverse decision is contemplated. Therefore, impugned order dated 25.03.2026 (Annexure P-6) deserves to be quashed.

6. On the other hand, learned Deputy Advocate General opposed the petition. However, he fairly submitted that before passing any adverse order, an opportunity of hearing ought to be granted to the petitioner in terms of Section 75(4) of the GST Act.

7. Heard learned counsel for the parties and perused the material available on record.

8. A Division Bench of this Court, vide order dated 22.01.2024, in paragraphs 7, 8 and 9, held as under :-

7. Before dealing with rival contentions, it is apposite to quote Section 75 (4) of GST Act which reads as under:-

“(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.”

(Emphasis supplied)

8. A plain reading of sub-section 4 of Section 75 of the Act makes it crystal clear that “opportunity of hearing” must be granted in two situations viz (a) where a request in specific is received in writing from the person chargeable; (b) where any adverse decision is contemplated against such person.

9. This is trite that when language of statute is plain and unambiguous, it should be given effect to irrespective of its consequences. (See Nelson Motis v. Union ofIndia (1992) 4 SCC 711).”

9 . In view of the aforesaid, and considering the admitted position that no opportunity of personal hearing was afforded to the petitioner, the decision-making process adopted by the respondents stands vitiated and is contrary to the principles of natural justice as well as the mandatory requirement contained in sub-section (4) of Section 75 of the GST Act.

10. As a result, the impugned order dated 25.3.2026 (Annexure-P/6) is set aside. The respondents shall provide an opportunity of hearing to the petitioner by some other officer than the officer who has issued the show cause notice to the petitioner and thereafter to pass final order, in accordance with law.

11. Writ petition stands disposed of.

12. It is made clear that this Court has not expressed any opinion on the merits of the case.