Omission of Personal Hearing is Violation of Section 75(4) of
the CGST Act and the Principles of Natural Justice
Brief
Summary:
In Tvl. Nethra
Enterprises Private Limited vs. State Tax Officer (ST) (W.P. No. 29466 of
2025), the Madras High Court set aside a GST assessment order issued without
granting a personal hearing after the taxpayer had specifically requested one
in their reply. The Court held that such omission violated Section 75(4) of
the CGST Act, 2017 and the principles of natural justice. The matter was
remanded for fresh adjudication.
Case Title
and Details:
- Case Name:
Tvl. Nethra Enterprises Private Limited vs. State Tax Officer (ST)
- Writ Petition No.:
29466 of 2025 & W.M.P.Nos. 33021 and 33024 of 2025
- Date of Order:
07.08.2025
- Court:
High Court of Judicature at Madras
- Presiding Judge:
Hon’ble Mr. Justice Krishnan Ramasamy
Background
and Facts:
- The petitioner, Tvl. Nethra
Enterprises Private Limited, received a show cause notice dated
19.12.2024, followed by a reminder dated 01.04.2025.
- The petitioner submitted a reply
on 02.06.2025, specifically requesting a personal hearing.
- However, the assessment order
dated 21.07.2025 was passed without granting any personal hearing
after the reply was filed.
- The assessment order referred to a personal
hearing notice dated 01.04.2025, which had been issued before
the reply, making it ineffective in satisfying the post-reply hearing
requirement.
Submissions
Before the Court:
Petitioner’s
Contentions:
- The petitioner argued that the
hearing notice dated 01.04.2025 could not substitute a hearing after the
reply dated 02.06.2025.
- Failure to grant a post-reply
personal hearing violated Section 75(4) of the CGST Act, 2017 and
the principles of natural justice.
- Requested the Court to set aside the
assessment order.
Respondent’s
Position:
- The Special Government Pleader fairly
admitted that no personal hearing was provided after the reply.
- Left the matter to the discretion of
the Court.
Findings of
the Court:
- Section 75(4) of the CGST Act
mandates an opportunity for a personal hearing before confirming a tax
demand.
- Violation of this provision amounts
to a breach of natural justice.
- The personal hearing notice issued before
the reply could not be treated as compliance with the law.
- Orders passed without post-reply
hearings deprive taxpayers of their right to defend their case.
Final
Judgment & Directions:
The Court:
1. Set
aside the assessment order dated 21.07.2025.
2. Remanded
the matter to the respondent for fresh consideration.
3. Directed
the petitioner to file additional reply/objections with supporting
documents within two weeks.
4. Directed
the respondent to:
o Issue
7 days’ clear notice fixing a date for personal hearing.
o Pass
a reasoned order on merits after the hearing.
The writ petition was disposed
of with no costs.
Key Legal
Takeaways:
- Personal hearing after reply is
mandatory under Section 75(4) CGST Act before
passing a demand order.
- A pre-reply hearing notice
does not fulfil this requirement.
- Even when the department sends a
hearing notice earlier, it must be re-issued or confirmed after
considering the taxpayer’s reply.
- The ruling strengthens procedural
fairness in GST adjudication.
Conclusion:
The Nethra Enterprises
decision reaffirms that procedural safeguards are not mere formalities.
Authorities must provide a real and effective chance to be heard, particularly
after receiving the taxpayer’s defence. This case is a valuable precedent for
challenging GST orders passed without complying with the mandatory hearing
requirement.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
Press On Click Here To Download Order File
Click here
