Denial of mandatory personal hearing vitiates assessment order

Denial of mandatory personal hearing vitiates assessment order, requiring setting aside and fresh adjudication.

Issue

Whether an assessment order passed under Section 75(4) of the CGST/RGST Act, 2017 without affording a personal hearing—despite a written request and contemplation of an adverse decision—is legally sustainable.

Facts

Issuance of SCN: The Proper Officer issued a Show Cause Notice (SCN) proposing a demand of tax, interest, and penalty for the tax period 2022–23.
Flawed DRC-01: The summary notice in Form GST DRC-01 specified a last date for filing a reply but listed personal hearing details as “NA” (Not Applicable).
Assessee’s Reply & Request: The assessee filed a written reply before the final order was passed, explicitly requesting an opportunity for a personal hearing.
Ex-Parte Assessment: The Proper Officer passed an ex-parte assessment order without fixing or communicating any date for a personal hearing.
False Finding: The Proper Officer erroneously recorded in the assessment order that no reply had been filed by the assessee.
Writ Petition: The assessee filed a writ petition challenging the order on the grounds of non-compliance with statutory provisions and violation of principles of natural justice.

Decision

Mandatory Statutory Requirement: Under Section 75(4) of the CGST/RGST Act, 2017, an opportunity of personal hearing must be granted whenever an adverse decision is contemplated or when a specific request is made by the tax assessee.
No Separate Request Needed: Since the issuance of an SCN itself indicates the contemplation of an adverse action, a formal written request for a personal hearing is not even strictly necessary.
Inadequate Notice Format: Marking personal hearing details as “NA” in Form GST DRC-01 does not negate the statutory obligation of the tax authority to grant a personal hearing post-reply.
Breach of Natural Justice: Ignoring the written reply already on record and failing to fix a date for a personal hearing vitiated the assessment order due to a clear breach of natural justice.
Final Ruling: The High Court allowed the writ petition, set aside the impugned assessment order, and imposed exemplary costs on the respondents. The matter was remanded to permit the tax authorities to proceed afresh from the stage of considering the reply after affording a proper personal hearing.

Key Takeaways

Section 75(4) is Mandatory: Granting a personal hearing is an indispensable statutory mandate under GST law whenever a tax demand or adverse order is contemplated.
Portal Form Defaults Cannot Override Law: Pre-printed or automated entries like “NA” in Form GST DRC-01 cannot deprive an assessee of their statutory right to a personal hearing.
Ignoring Filed Replies Vitiates Orders: Passing ex-parte orders while falsely stating that no reply was filed constitutes a severe procedural defect warranting setting aside the order and potential imposition of costs on the Revenue.

HIGH COURT OF RAJASTHAN

Navin Tent House

State of Rajasthan

MUNNURI LAXMAN and Anuroop Singhi, JJ.

D.B. Civil Writ Petition No. 15277 OF 2026

JULY 23, 2026

Prateek Gattani for the Petitioner. Harshvardhan Singh and Mahaveer Bishnoi, AAG for the Respondent.

ORDER

1. The present writ petition has been filed challenging the assessment order dated 03.06.2026 (Annex.7) primarily on the ground that despite reply being filed by the petitioner and request being made for grant of personal hearing prior to passing of the said impugned order, the respondent(s), without considering the reply and without giving an opportunity of personal hearing, passed the impugned order contrary to the provisions of Section 75(4) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the Act of 2017’).

2. The case of the petitioner is that the respondent(s) issued a show-cause notice dated 24.03.2026 (Annex.5) under Section 74(1) of the Act of 2017 requiring it to show cause as to why the amount mentioned in the notice be not demanded and recovered from the petitioner towards tax, interest and penalty for the Financial Year 2022-23. The due date for filing a reply to the show-cause notice was 24.04.2026 being 30 days from the date of receipt of the notice. The petitioner filed its reply on 06.05.2026 (Annex.6) along with a written request for grant of a personal hearing before any adverse order is passed against the petitioner, however, the respondent authorities passed an adverse ex parte order dated 03.06.2026 assessing liability against the assessee towards short paid tax, interest and penalty, without considering the reply as well as without granting any opportunity of personal hearing. Therefore, the petitioner is before this Court.

3. Learned counsel appearing on behalf of the petitioner submits that as per Section 75(4) of the Act of 2017, an opportunity of personal hearing has to be granted where there is a written request from the assessee or where any adverse order is contemplated against such person. In the present case, although the reply and written request for personal hearing were filed by the petitioner subsequent to the due date prescribed for filing the reply, however, as the respondent authorities had not passed an ex parte order by the date on which the reply and written request were filed, the respondent authorities could not have ignored the reply and the written request made by the petitioner seeking an opportunity of personal hearing. Hence, the impugned order is not sustainable.

4. It is also his contention that the impugned order clearly records that no reply had been filed by the petitioner till the date of passing of the impugned order, which is contrary to the facts and material available on record and the respondent(s), without application of mind has passed the impugned order, which requires to be interfered with.

5. Per contra, the submission of the learned counsel appearing on behalf of the respondent authorities is that the show-cause notice was issued on 24.03.2026, which clearly prescribed the last date for submission of the reply and also required the petitioner to appear for a personal hearing, however, as no reply was filed within the stipulated time, the petitioner was not entitled to seek consideration of the reply filed beyond the prescribed period.

6. It is also the stand of the learned counsel appearing on behalf of the respondents that, since the written request was not received within the prescribed time for filing the reply and for seeking a personal hearing, any request received at a later point of time cannot be considered for grant of an opportunity of personal hearing. The respondent authorities, therefore, proceeded to decide the proceedings ex parte on account of nonfurnishing of a reply within the stipulated time and thus, he contends that the impugned order is justified.

7. In this regard, it is apposite to refer to Section 75(4) of the Act of 2017, which reads as under:

“75 General provisions relating to determination of tax.

(1) ….

(2) ….

(3) ….

(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.”

8. From a plain reading of the above provision, it is clear that an opportunity of hearing is required to be granted where a person chargeable with tax or penalty makes a written request for such an opportunity. The said provision also provides that where an adverse decision is contemplated against such person, opportunity of hearing has to be granted. The issuance of a showcause notice itself is an indication of the contemplation of adverse proceedings against the noticee. Therefore, as per sub-section (4) of Section 75 of the Act of 2017 a written request is not even required in a case where an adverse decision is contemplated.

9. The next question that arises is whether an opportunity of hearing under Section 75(4) of the Act of 2017 includes an opportunity of personal hearing. An opportunity of hearing may be afforded at various stages and granting time to file a reply also constitutes an opportunity of hearing before a decision is taken on the contemplated action. However, the provision does not clearly indicate as to whether Section 75(4) of the Act of 2017 includes grant of personal hearing as well. Therefore, we have to fall back upon the relevant DRC-01 Form, which forms part of the showcause notice. The DRC-01 Form reads as under:

DRC 01 2022-23.pdf : drc 01

Details of personal hearing and due date to file reply.

Sr. No.	Description	Particulars
1	Date by which reply has to be submitted	24-04-2026
2	Date of personal hearing	NA
3	Time of personal hearing	NA
4	Venue where personal hearing will be held	NA

10. The contents of the show-cause notice read along with the DRC-01 Form, clearly stipulates that there is a specific contemplation of grant of personal hearing even after the passing of the due date for submission of reply. In the present case, there is no material on record to indicate that, after the expiry of the due date for submission of the reply, any date was fixed for a personal hearing before the written request was made by the petitioner on 06.05.2026.

11. A plain reading of the impugned order reveals that it does not refer to any date fixed for personal hearing after the expiry of the due date for submission of the reply. Rather, the impugned order proceeds on the premise that no reply has been filed by the petitioner and decides the matter without considering the reply actually filed on 06.05.2026, which was much before the date of passing of the impugned order being 03.06.2026. Therefore, the impugned order is liable to be interfered with.

12. We have clearly noticed that, despite the submission of the reply, the authorities proceeded as if no reply had been filed. There is a gross dereliction on the part of the concerned authority in applying its mind to the proceedings pending before it. As a result of such improper application of mind, the assessee was subjected to undue hardship and was compelled to approach this Court, thereby incurring unnecessary costs. Therefore, we are inclined to impose exemplary costs as well.

13. In the result, the present writ petition is allowed. The impugned assessment order dated 03.06.2026 (Annex.7) is set aside. Respondent No.3 shall pay exemplary costs of Rs.10,000/-to the petitioner, and the said costs shall be paid within a period of one month from today.

14. The respondents are at liberty to initiate fresh proceedings from the stage of consideration of the reply and after providing an opportunity of personal hearing as required under the law.

15. All pending application(s), if any, shall stand disposed of.