Case Details
Case Title: Viswaat Chemicals Limited & Anr. v. Sales Tax Officer, Ghatak & Anr.
Court: High Court of Gujarat, Ahmedabad
Petition No.: R/Special Civil Application No. 16217 of 2024
Judgment Date: 27 March 2025
Category of Dispute: Input Tax Credit – excess ITC recovery & principles of natural justice
Relevant Sections: Section 73, Section 75(4), Section 107 of the CGST Act, 2017; Rule 99 of CGST Rules, 2017
Facts (Paras 4–13)
The petitioners, manufacturers of speciality chemicals, were issued an intimation in Form ASMT-10 in September 2022 under Rule 99 of the CGST Rules, pointing out discrepancies in GST returns. A show cause notice (SCN) dated 31.07.2023 in Form DRC-01 under Section 73 sought recovery of excess IGST ITC of ₹18,66,606/-. The SCN was uploaded under the “Additional Notices” tab on GSTN instead of “Notices/Orders” tab, leading the petitioners to miss it. Without granting personal hearing, respondent passed an ex parte order-in-original dated 11.10.2023 confirming demand with interest and penalty for FY 2020-21. Petitioners came to know only after their bank account was attached on 19.06.2024. Appeal under Section 107 was rejected as time-barred since the order was presumed to be served via email ID of a former employee, which had been disabled in 2020.
Questions in Dispute (Paras 3, 14–17)
-
Whether the ex parte order confirming ITC demand was valid when no personal hearing was granted as required under Section 75(4).
-
Whether uploading notices under a different tab on GST portal constitutes valid service.
-
Whether appeal could be rejected as time-barred when the order was never properly communicated to the petitioner.
Court’s Observations (Paras 20–22)
The Court held that the impugned order was passed in violation of Section 75(4) of the CGST Act, which mandates opportunity of hearing before passing any adverse order. Principles of natural justice were not followed as the assessee was deprived of chance to reconcile GSTR-2A with GSTR-3B. The Court clarified it was not going into merits of ITC mismatch but only on the denial of hearing.
Judgment (Paras 21–23)
The High Court quashed the order-in-original dated 11.10.2023 solely on grounds of violation of natural justice. The matter was remanded to the adjudicating authority to pass a fresh order de novo after providing opportunity of hearing to reconcile ITC mismatch. The exercise must be completed within 12 weeks.
Cases Referred – Tabular Summary
| Case Name | Court | Ratio / Verdict | Relevance |
|---|---|---|---|
| Viswaat Chemicals Ltd. v. Sales Tax Officer | Gujarat HC (2025) | Order quashed as no hearing was granted under Section 75(4); matter remanded | Reinforces mandatory hearing requirement in GST adjudication |
Between Fine Lines
This judgment underscores that GST authorities cannot confirm demands without granting a personal hearing under Section 75(4). Even if the assessee missed notices on GST portal, authorities must ensure proper communication and compliance with natural justice. For businesses, this means every ITC reconciliation dispute must be preceded by an opportunity to explain and reconcile GSTR-2A vs. GSTR-3B mismatches, failing which the demand is liable to be struck down.
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.”
