Personal Hearing Is Mandatory Before Adverse Order Even If Taxpayer Has Not Specifically Opted For It

By | September 28, 2026
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Personal Hearing Is Mandatory Before Adverse Order Even If Taxpayer Has Not Specifically Opted For It

Issue

  • Whether the Revenue is statutorily obligated under Section 75(4) to afford a personal hearing before passing an adverse adjudication order, even if the assessee has not explicitly opted for one.

Facts

  • Adjudication Order Passed: The respondent authority passed an adjudication order dated July 17, 2025, under Section 74, determining tax, interest, and penalty liabilities against the petitioner-firm.
  • Denial of Personal Hearing: The order was passed without extending an opportunity of personal hearing to the petitioner-firm.
  • Assessee’s Stand: The petitioner had not expressly opted for a personal hearing during the administrative proceedings.
  • Writ Petition Filed: The petitioner challenged the adjudication order before the High Court, relying on a precedent in its own case for a different year where a similar order was quashed due to a lack of personal hearing.

Decision

  • Mandatory Opportunity of Hearing: Under Section 75(4), whenever an adverse order is proposed against an assessee, the Revenue has a mandatory obligation to afford an opportunity of personal hearing, irrespective of whether the assessee specifically opted for it [In favor of assessee / Matter remanded].
  • Impugned Order Quashed: Following consistent judicial precedents from the same High Court and various other High Courts, the adjudication order dated July 17, 2025, was quashed for violating principles of natural justice [In favor of assessee / Matter remanded].
  • Remand with Liberty: The Revenue was granted liberty to pass a fresh order after affording a proper opportunity of personal hearing to the petitioner-firm [In favor of assessee / Matter remanded].

Key Takeaways

  • Section 75(4) Requirement Is Mandatory: Providing a personal hearing before issuing an adverse GST adjudication order is an absolute statutory obligation, not a discretionary option for tax officers.
  • Unopted Hearing Still Required: The failure of a taxpayer to explicitly select or check the box for a personal hearing in online replies does not waive their statutory right to be heard before an adverse decision is rendered.
  • Natural Justice Breach Vitiates Orders: Orders passed in violation of Section 75(4) are legally unsustainable and subject to being quashed by High Courts with instructions for fresh adjudication.
HIGH COURT OF UTTARAKHAND
Shivtara Developers
v.
State of Uttarakhand
Manoj Kumar Gupta, CJ.
and Subhash Upadhyay, J.
WRIT PETITION (M/B) NO. 776 OF 2026
SEPTEMBER  17, 2026
Manoj Kumar Gupta, CJ. – The present writ petition is directed against the order dated 17.07.2025, passed by respondent no.3 under Section 74 of the Uttarakhand Goods and Services Tax Act, 2017, whereby tax liability of Rs.12,93,408/- along with interest of Rs.2,88,943.80/-and penalty of Rs.12,93,408/-, has been imposed upon the petitioner firm.
2. The contention of learned counsel for the petitioner firm is that the Department has passed the impugned order without providing any opportunity of hearing to the petitioner firm, which is a mandatory requirement under Section 75(4) of the Act. He further submits that in similar facts and circumstances, the writ petition filed by the petitioner firm bearing Shivtara Developers v. State of Uttarakhand [WP (MB) No. 702 of 2026, dated 9-9-2026], challenging another order under Section 74 of the Act in respect of a different financial year, has already been decided and the impugned order therein has been quashed.
3. Ms. Puja Banga, learned Standing Counsel for the Revenue, however, submits that the petitioner firm had not opted for personal hearing and, therefore, it was not provided to the petitioner firm.
4. Section 75(4) of the Act reads as follows:-
“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.”
5. It has been repeatedly held by this Court and by various other High Courts that even if the assessee had not opted for personal hearing, in case, the revenue proposes to pass an adverse order, it is obligatory on its part to afford personal hearing to the assessee. The same view was taken by this Court while deciding the previous writ petition of the petitioner bearing Writ Petition (M/B) No.702 of 2026.
6. In view of the above, the impugned order is, hereby, quashed. It shall be open to the Department to pass a fresh order after providing opportunity of hearing to the petitioner firm.
7. Pending application, if any, also stands disposed of.