Personal Hearing Marked ‘NA’: Court Strikes Down GST Order for No Hearing

M/s Kisan Traders, through its proprietor Shyam Singh, challenged an ex-parte order dated 26.04.2024 passed under Section 73(9) of the GST Act for FY 2018-19, whereby tax, interest and penalty amounting to Rs. 6,75,552/- were imposed.

The petitioner also assailed the show cause notice dated 22.12.2023, contending that it was defective as no date, time, or place of personal hearing was mentioned and only “N.A.” was reflected in the relevant columns. Although replies were filed to the show cause notices, no opportunity of oral hearing was granted before passing the final order.

Issue Raised: Whether an adjudication order under Section 73 of the GST Act can be sustained when no opportunity of personal hearing is granted and the show cause notice itself is procedurally defective.

HC’s Ruling: The Allahabad High Court held that the principles laid down in Mahaveer Trading Company v. Deputy Commissioner State Tax squarely applied to the present case. The Court observed that before passing any adverse order, a meaningful opportunity of personal hearing must be offered unless expressly waived by the noticee. The issuance of a show cause notice without specifying the date, time and place of hearing, followed by an ex-parte order, amounted to gross violation of principles of natural justice. The Court further held that in such exceptional cases, the existence of an alternative statutory remedy would not bar the exercise of writ jurisdiction.

Therefore, the impugned ex-parte order dated 26.04.2024 was quashed and set aside, with liberty granted to the Department to issue a fresh show cause notice and proceed in accordance with law.

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