GST demand quashed as order under Section 74 was passed without granting mandatory opportunity of hearing under Section 75(4)

Case Details

Case Title: Greentech IT City Private Limited v. The State of West Bengal & Ors.
Court: Calcutta High Court
Petition No.: WPA 27634 of 2024
Category of Dispute: Natural justice in adjudication under Section 74 – denial of opportunity of hearing
Relevant Sections: Section 74, Section 75(4) of CGST/WBGST Act, 2017
Date of Judgment: 19.05.2025

Facts (Paras 1–3)

The petitioner, Greentech IT City Pvt. Ltd., challenged an order dated 25th June 2024 passed under Section 74 of the WBGST/CGST Act for the tax period April 2018–March 2021. The petitioner argued that the show cause notice issued in Form GST DRC-01 on 17th April 2024 failed to intimate any date of personal hearing. Despite this lapse, the adjudicating authority proceeded to decide the matter and passed the impugned order without affording the petitioner a chance to be heard.

Questions / Dispute

Whether an order under Section 74 of the GST Act can be sustained when the mandatory requirement under Section 75(4) of granting an opportunity of hearing before passing an adverse order has not been complied with?

Observations (Paras 4–5)

The State did not dispute that no opportunity of personal hearing was granted. The Court noted that Section 75(4) of the Act mandates a hearing before passing any adverse order. Since this statutory safeguard was ignored, the Court observed that the adjudication was fundamentally flawed and contrary to principles of natural justice.

Judgment (Paras 5–8)

The Calcutta High Court held that the impugned order dated 25th June 2024 under Section 74 was unsustainable. The order and all consequential actions were set aside. The matter was remanded back to the proper officer to adjudicate afresh after granting the petitioner an opportunity to reply and a personal hearing, with the process to be concluded within 16 weeks from the date of communication of the Court’s order.

Table of Cases Referred

Between Fine Lines

For trade and industry, this ruling reiterates that any GST order passed under Section 74 without granting a personal hearing as required under Section 75(4) is liable to be quashed. Businesses facing demands should carefully check if principles of natural justice, particularly the right to be heard, were followed before accepting or challenging such orders.

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