Adjudication Order Passed Without Granting Mandatory Personal Hearing Under Section 75(4) Invalid and Remanded for Fresh Decision

By | September 21, 2026
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Adjudication Order Passed Without Granting Mandatory Personal Hearing Under Section 75(4) Invalid and Remanded for Fresh Decision
Issue
Whether an adjudication order passed under Section 73 is legally sustainable when the taxpayer was not granted a mandatory personal hearing under Section 75(4) despite the Show Cause Notice contemplating an adverse decision.
Facts
  • Tax Period: The dispute pertains to the tax period spanning July 2017 to March 2018 under WBGST/CGST.
  • Issuance of SCN: The tax department issued a Show Cause Notice (SCN) in Form DRC-01 proposing a demand for tax or Input Tax Credit (ITC) not involving fraud.
  • Denial of Opportunity: The petitioner was not afforded an opportunity of personal hearing during the adjudication proceedings, even though the SCN contemplated an adverse decision.
  • Coercive Recovery: An adjudication order was passed against the petitioner, and the department subsequently realized the entire tax demand through attachment orders.
  • Writ Petition Filed: The petitioner assailed the adjudication order and bank attachment via a writ petition, alleging a violation of statutory hearing mandates and principles of natural justice.
Decision
  • Mandatory Nature of Hearing: The court held that the statutory scheme under Section 75(4) makes it mandatory to afford a personal hearing where an adverse decision is contemplated against a taxable person.
  • Breach of Statutory Mandate: Since no personal hearing was granted despite an adverse order being passed, the impugned adjudication order suffered from a fatal procedural flaw and was unsustainable in law.
  • Quashing and Remand: The court set aside the adjudication order and quashed the attachment order.
  • Direction for Recovery: The matter was remanded to the proper officer for a fresh decision after providing a personal hearing and passing a reasoned order. The demand already realized by the department was ordered to abide by the final outcome of the remanded proceedings.
Key Takeaways
  • Strict Mandate of Section 75(4): Offering a personal hearing is not discretionary; it is a compulsory statutory requirement whenever an adverse decision is proposed under GST laws.
  • Violation of Natural Justice Nullifies Adjudication: Orders passed in breach of natural justice or explicit statutory hearing requirements are void and liable to be quashed on writ.
  • Treatment of Recovered Amounts: Setting aside an adjudication order invalidates consequential recovery actions, forcing the department to hold realized amounts subject to the fresh outcome of remanded proceedings.
HIGH COURT OF CALCUTTA
Harphool Chowdhury @ Harphool Choudhary
v.
State of West Bengal
Raja Basu Chowdhury, J.
WPA NO.1952 of 2026
SEPTEMBER  7, 2026
Himangshu Kr. Ray, Subhasis Poddar, Abhilash Mittal and Mrs. Hiqa Naz Pradhan for the Petitioner. Kunaljit Bhattacharjee, Ld. AGP, Ms. Radhika Agarwal and Prasanta Joarder for the Respondent.
ORDER
1. The affidavit-of-service filed in Court today is taken on record.
2. Challenging the order passed under Section 73 of the WBGST/CGST Act, 2017 (hereinafter referred to as the said Act) dated 14th December, 2023 for the tax period of July 2017 to March, 2018, the instant writ petition has been filed.
3. Mr. Roy, learned advocate representing the petitioner by drawing attention to this Court to the show-cause notice issued in form DRC 01 dated 31st August, 2023 would submit that the petitioner was not afforded with an opportunity of hearing though an adverse order was contemplated against the petitioner at the show-cause stage. According to him, the order passed by the respondents stand vitiated on the ground of noncompliance of Section 75 (4) of the said Act.
4. The State respondents and the bank are represented.
5. Having heard the learned advocates appearing for the respective parties, I find that the Scheme of the said Act, inter alia, provides for an opportunity to the person chargable with tax and penalty to pray for any opportunity of hearing or where an adverse decision is contemplated against such person, to be entitled with an opportunity of hearing. In the instant case, none has disputed the fact that the petitioner was not afforded with any opportunity of hearing though the show-cause itself contemplated of an adverse order being passed. In the peculiar facts, I am of the view that the impugned order dated 14th December, 2023 cannot be sustained. Further, noting that the entire demand has already been realized, in my view, it shall only be prudent to remand the matter back to the proper officer and to permit the petitioner to file a response to the show-cause. If such response is filed within a period of two weeks from date or if, no such response is filed, the proper officer having regard to the observations made herein, in accordance with Section 75(4) of the said Act, shall decide on the same after giving an opportunity of hearing to the petitioner in accordance with law by passing a reasoned order.
6. It is made clear if, on the basis of the decision to be taken by the proper officer it transpires that any additional amount has been released, the said amount should be reversed. Thus, the demand already realized shall be subject to the result of the proceeding before the proper officer.
7. As a sequel thereto, the order of attachment issued by the respondents also stands quashed.
8. With the above observations and directions, the writ petition is disposed of.