The Patna High Court, in a 18 December 2024 oral judgment, reaffirmed that a GST assessment order passed without offering the taxpayer a personal hearing violates the statutory mandate of Section 75(4) of the GST enactments. The Court set aside the assessment order and the consequential DRC-07 and remitted the matter to the Assessing Officer with a clear schedule for fresh adjudication.
In this case, the petitioner had challenged an assessment and demand issued under GST. While arguments were raised on limitation, the Bench noted that those contentions already stood concluded against the petitioner by an earlier Division Bench decision (C.W.J.C. No. 4180 of 2024, decided on 27.11.2024), and therefore the real surviving grievance related to denial of a personal hearing under Section 75(4). Recognising that the statute obliges the authority to grant a reasonable opportunity of being heard when requested—or when adverse decisions are contemplated—the Court intervened to protect procedural fairness. The Court accordingly quashed the impugned order and the DRC-07 dated 29.11.2023 and directed the petitioner to appear before the Assessing Officer on 15.01.2025. The Assessing Officer was instructed to conclude the proceedings within three months from the date of the judgment or within the statutory limitation period, whichever falls later.
This decision underscores a consistent judicial approach: even when merits or limitation issues may not favour the taxpayer, a breach of the minimum procedural safeguards—especially the right to a personal hearing—will vitiate the assessment. The Court’s concise but decisive order thus aligns with the broader principles of natural justice embedded in the GST framework.
Significance or Implication of the Judgment
This order has concrete implications for both taxpayers and the tax administration in Bihar and beyond:
- Reinforcement of Procedural Safeguards: Section 75(4) of the GST Acts is not a mere formality. Whenever the authority proposes an adverse decision or a hearing is requested, a proper personal hearing must be offered and conducted. Orders passed in breach of this requirement are vulnerable to being set aside, irrespective of the outcome on other issues like limitation.
- Practical Compliance Roadmap: The Court did not merely quash the order; it gave operational directions—to appear on a specified date (15.01.2025) and to complete the proceedings within a defined time (three months from the date of judgment or later if the statutory limitation permits). This approach promotes certainty, avoids open-ended remands, and ensures that both sides get closure expeditiously.
- Guidance for Taxpayers: Assessees facing ex parte or hurried assessments can rely on this precedent to insist on their statutory right to a hearing. However, they should also be prepared to participate promptly when the matter is remitted and to place complete records and submissions on the file, as the Court expects efficient cooperation during the de novo proceedings.
- Guidance for the Department: The decision serves as a reminder to ensure show cause notices, hearing notices, and hearing logs are properly issued, recorded, and uploaded. Doing so not only complies with Section 75(4) but also strengthens the sustainability of assessments on appellate or judicial review.
Legal Issue(s) Decided and the Court’s Decision with Reasoning
- Whether the GST assessment and DRC-07 issued to the petitioner could stand when the authority did not grant a personal hearing under Section 75(4) of the GST enactments.
Decision: No. The Court held that the impugned assessment order suffered from violation of the statutory mandate under Section 75(4). Consequently, the assessment order and the consequential DRC-07 dated 29.11.2023 were set aside. The matter was remitted with directions for a fresh hearing and disposal. Reasoning: Section 75(4) requires a reasonable opportunity of personal hearing in situations where an adverse decision is contemplated or the assessee requests it. Non-compliance with this mandate renders the order vulnerable and warrants interference. - Whether the petitioner’s arguments on limitation could aid in quashing the assessment on that ground.
Decision: No (as far as this case is concerned). The Court expressly recorded that the limitation contentions raised stood already answered against the petitioner in C.W.J.C. No. 4180 of 2024 (M/s Barhonia Engicon Private Limited v. Union of India & Ors.), decided on 27.11.2024. Hence, the Court did not grant relief on limitation; instead, relief was granted solely due to the Section 75(4) violation. Reasoning: Once a coordinate Bench has ruled on a question (here, limitation) in analogous matters, the issue is treated as concluded. The Court, therefore, focused on the procedural violation.
Judgments Relied Upon or Cited by Court
- C.W.J.C. No. 4180 of 2024, M/s Barhonia Engicon Private Limited v. Union of India & Ors., judgment dated 27.11.2024 (to address and conclude the limitation contention against the petitioner).
Case Title
- Petitioner v. Union of India & Ors. (Patna High Court; anonymized for publication)
Case Number
- Civil Writ Jurisdiction Case No. 12003 of 2024 (Patna High Court)
Coram and Names of Judges — Always prefix with Hon’ble
- Hon’ble the Chief Justice K. Vinod Chandran
- Hon’ble Mr. Justice Partha Sarthy
Names of Advocates and who they appeared for
- For the petitioner: Mr. D. V. Pathy, Advocate
- For the respondents: Dr. K. N. Singh, ASG; Mr. Anshuman Singh, Sr. Standing Counsel, CGST & CX
Link to Judgment
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