Personal hearing is mandatory before passing the order

The Hon’ble Allahabad High Court (Lucknow Bench) in the case of Prem Traders v. State of Uttar Pradesh [Writ Petition No. 261/2025 dated March 28, 2025] quashed the Order passed under Section 73 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”), on the ground that no opportunity of personal hearing was provided to the Assessee.

Facts:

Prem Traders (“the Petitioner”) filed a writ petition under Article 226 of the Constitution, challenging the Order dated April 29, 2024 (“the Impugned Order”) issued under Section 73 of the CGST Act.

The Impugned Order itself showed that the same has been passed without giving opportunity of hearing to the Petitioner. Further, no specific date for hearing was fixed, in fact the same date was fixed for filing objection and for hearing.

Hence, aggrieved by the Impugned Order, the Petitioner filed the present writ petition.

Issue:

Whether personal hearing is mandatory before passing the order?

Held:

The Hon’ble Allahabad High Court (Lucknow Bench)in W.P. (T) Nos. 261/2025 held as under:

• Observed that, the manner of fixing date is against CBIC Master Circular bearing No. F.No. 96/1/2017 dated March 10, 2017 (“the Circular”), issued by the Department itself.
• Relied on, the Division Bench judgment in Mahaveer Trading Company v. Deputy Commissioner, State Tax and Another [Writ Tax No. 303 of 2024 dated March 04, 2024], wherein an identical procedural infirmity was squarely covered.
• Held that, the Impugned Order was liable to be quashed, and the matter was remanded to the Assessing Authority for fresh adjudication by law, after providing the petitioner with a meaningful opportunity of hearing.

Our Comments:

Section 75(4) of the CGST Act governs “General provisions relating to determination of tax”. Further, Section 75(4) of the CGST Act states that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.

In pari materia case of M/s Mohini Traders v. State of Uttar Pradesh and Another [Writ Tax No. 551 of 2023 dated May 03, 2023], the Hon’ble Allahabad High Court held that once it has been laid down by way of a principle of law that a person is not required to request for “opportunity of personal hearing” and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order, the fact that the petitioner may have signified ‘No’ in the column meant to mark the assessee’s choice to avail personal hearing, would bear no legal consequence.

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