GST assessment order quashed as failure to grant personal hearing under Section 75(4) held to violate principles of natural justice

Case Title: M/s Vishnu Essence Through its Partner Amit Bothra v. State of Madhya Pradesh and Others
Court: High Court of Madhya Pradesh, Indore Bench
Petition Nos.: W.P. No. 20336 of 2023 & W.P. No. 20339 of 2023
Date of Judgment: 11 July 2025
Category: Natural Justice / Assessment / Personal Hearing under GST
Relevant Sections: Section 74(9) and Section 75(4) of the MPGST Act, 2017; Rule 142(1A) of the MPGST Rules
Neutral Citation: 2025:MPHC-IND:17800

Facts (Paras 2–4)

M/s Vishnu Essence, a partnership firm registered under the MPGST Act, faced a search and seizure operation under Section 67 on 10.01.2020. Based on reports by the search wing and a Chartered Engineer estimating power consumption, the Deputy Commissioner initiated proceedings under Section 74 and issued intimation (DRC-01A) demanding additional GST, Cess, and penalty for FY 2018-19 and 2019-20. Despite filing objections and a written request for a personal hearing, the authority issued a cryptic order (DRC-07 dated 09.06.2023) without granting such hearing. The petitioner challenged the order as violative of Section 75(4) and principles of audi alteram partem.

Questions for Consideration (Para 5–6)

Whether the assessing authority’s failure to afford a personal hearing, despite a written request, vitiates the GST proceedings and renders the assessment order unsustainable in law under Section 75(4) of the MPGST Act.

Observations (Paras 6–9)

The Court emphasized that Section 75(4) mandates a personal hearing whenever requested in writing or when an adverse decision is contemplated. Relying on A.S. Motors Pvt. Ltd. v. Union of India (2013) 10 SCC 114, the Bench reiterated that natural justice demands fairness, and absence of a hearing amounts to arbitrariness. Citing Ultratech Cement Ltd. v. State of MP (W.P. No. 617/2023) and Technosys Security Systems (P) Ltd. v. Commissioner, Commercial Taxes (2023) 157 Taxmann.com 145 (MP),* the Court reaffirmed that personal hearing is mandatory, not discretionary. Even if no express request is made, hearing must be provided before any adverse decision.

Judgment (Paras 10–11)

The Court held that the authority committed a manifest error of law by not affording a personal hearing as required under Section 75(4). Accordingly, the impugned orders dated 09.06.2023 were quashed, and the cases were remanded to a different assessing officer to decide afresh after granting proper opportunity of personal hearing.

Summary of Cases Referred

Between Fine Lines (Trade Takeaway)

This ruling reinforces that Section 75(4) of the GST Act is not procedural but substantive. Every GST assessee facing an adverse order must be offered a personal hearing, and failure to do so nullifies the entire assessment. Officers must ensure transparent and participative adjudication, as absence of hearing equates to denial of justice. Businesses should preserve written evidence of hearing requests to protect procedural rights.

Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”