GST Demand Order Invalid Without Personal Hearing, Rules Patna High Court:

GST Demand Order Invalid Without Personal Hearing, Rules Patna High Court The Patna High Court set aside a tax demand order issued against the company, Neeraj Bricks, under the Bihar Goods and Services Tax (BGST) Act, 2017. The case was filed by the brick-manufacturing firm after tax authorities imposed a liability of over Rs 21 lakh, including tax, interest, and penalty for the financial year 2018-19. Sri Ramesh Kumar Singh, the proprietor of the company Neeraj Bricks, had filed the present writ petition before the Patna High Court, claiming that he was served with the show cause documents and the notices belonging to the proceedings merely on the GST portal, and no other means of communication was adopted to make him aware of the proceedings. He claims that he is a small-type trader, not properly aware of how to use digital systems.

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The petitioner further contended that the tax authorities had contravened the legal requirements under the provisions of Sections 169 and 75(4) of the Bihar Goods and Services Tax (BGST) Act, 2017, as they did not grant him any proper opportunity of personal hearing (no hearing notice was issued) before the issuance of the final order, which is a clear violation of principles of natural justice. Hence, the impugned order is liable to be set aside. In support of his claims, the petitioner cited earlier high court judgements in the cases titled Rounak Int. Udyag and Anr. vs. State of Bihar (CWJC No. 7580 of 2025) and M/s Durga Paper Plate Industries vs. Union of India & Ors. (CWJC No. 7911 of 2025), based on a similar issue.

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During the hearing before the High Court, the tax authorities did not argue on the cases cited by the petitioner and the ruling given in the same; considering the same, the High Court quashed the impugned DRC-07 order dated April 27, 2024, and remanded the case back to the tax authorities for fresh consideration. The tax authorities have been directed to grant the petitioner a proper opportunity of hearing in accordance with the law and pass a fresh order within four months.