Mentioning “NA” in Personal Hearing Column Violates Section 75(4): HC Sets Aside GST Order

The Allahabad High Court set aside a GST order, as the relevant notice did not give any details about the mandatory personal hearing, violating section 75(4) of the GST Act.

The petitioner, M/s Krishna Traders, received a show cause notice under Section 73(1) of the Act, followed by a reminder notice on 13 August 2024 regarding the mismatches in the GST returns. However, the petitioner was not given the opportunity of a personal hearing. In the notices, the column for the “date of personal hearing” mentioned “NA” (Not Applicable). The petitioner challenged this before the Allahabad High Court.

The court observed that, as per section 75(4) of the GST Act, the tax authority must give a personal hearing to the registered taxpayer before passing any GST order. This was a clear violation of principles of natural justice.

The court further explained that the taxpayers get two different opportunities. The first is the reply to the notice, and the second is giving the opportunity for an oral hearing. If the taxpayer does not avail himself of one opportunity, it does not mean that he will be denied the second opportunity.

Therefore, the court quashed the GST order, holding that the GST authority did not follow the mandatory procedure while issuing the order. The matter was remanded to the assessing authority for fresh consideration. The petitioner was directed to submit its reply to the show cause notice within two weeks and appear before the assessing authority for a personal hearing, after which the assessing authority must pass a reasoned order.