Madras HC Quashes GST Order Passed Without Hearing

The applicant, Vision Leather Impex, received a show cause notice (SCN) from the GST Department on 27 December 2023, for which the company requested to extend the due date for filing a reply. But instead of extending the due date to file the reply or replying to their request, the tax officer directly passed an order. Therefore, the applicant requested the court to give them a chance to represent themself and set aside the order passed by the tax officer.

The petitioner’s learned counsel submitted that the petitioner was not given any chance to be heard before passing this final order. He further submitted that if given a chance, the petitioner was willing to pay 25% of the disputed tax amount to the tax officer.

The advocate appearing for the respondent admitted that the tax notices were only uploaded online on the GST portal and that the petitioner was not given a chance to be heard before passing the final order.

Madras High Court Decision

The Madras High Court stated that under Section 75(4) of the GST Act, if a tax authority plans to pass an order, it must give the taxpayer a chance for a personal hearing. The court observed that in this case, the department did not give a chance to be heard, violating natural justice. Therefore, the High Court cancelled the tax order and gave the following directions:

• The company must pay 25% of the disputed tax amount within 4 weeks.
• After payment, the company must file its detailed objections within 3 weeks.
• The tax officer must give 14 days’ notice for a personal hearing and pass a fresh order after hearing the company’s side.