The Calcutta High Court has reaffirmed a foundational principle of administrative justice: the right to a fair hearing cannot be forfeited merely because a taxpayer files a response after the stipulated deadline. In a significant ruling under the CGST Act, the Court set aside a tax assessment order passed without affording the assessee an opportunity of hearing, emphasizing that procedural compliance is non-negotiable even in technical tax proceedings.
Background & Facts
The Dispute
The petitioner, M/s. N. Goswamin Associates, faced a tax demand notice for the period July 2017 to March 2018 under the West Bengal Goods and Services Tax Act, 2017, read with the Central Goods and Services Tax Act, 2017. The dispute arose from the tax authorities’ determination of additional liability, which led to the issuance of two show cause notices and ultimately an adverse order under Section 73(9) of the Act.
Key Facts
- The first show cause notice (GST DRC-01, Ref: ZD1909230309814) was issued on 19.09.2023, requiring a response by 18.10.2023
- A second show cause notice (GST DRC-01, Ref: ZD1909230313477) was issued on the same date (19.09.2023), requiring response by 19.10.2023
- Neither notice specified a date for personal hearing
- The petitioner, claiming ill health and cessation of business, filed a response in Form GST DRC-06 on 31.10.2023 - after the deadline
- A reminder letter was issued on 16.10.2023, prompting the petitioner to respond
- No hearing was conducted before the order under Section 73(9) was passed on 29.12.2023
- A communication dated 21.12.2023 was sent by post to the petitioner, but not uploaded to the GST portal
- The petitioner’s GST registration was cancelled on request prior to the order
Procedural History
- 19.09.2023: First show cause notice issued
- 19.09.2023: Second show cause notice issued
- 16.10.2023: Reminder letter sent
- 31.10.2023: Petitioner filed response in Form GST DRC-06 (late)
- 29.12.2023: Order under Section 73(9) passed without hearing
- 09.04.2024: Writ Petition (WPA 1735 of 2025) filed before Calcutta High Court, Circuit Bench at Jalpaiguri
Relief Sought
The petitioner sought quashing of the order dated 29.12.2023, restoration of GST registration for the purpose of hearing, and direction to conduct a fresh hearing in accordance with law.
The Legal Issue
The central question was whether Section 75(4) of the CGST Act mandates an opportunity of hearing before passing an adverse order under Section 73(9), even when the assessee fails to respond to the show cause notice within the stipulated time.
Arguments Presented
For the Petitioner
The petitioner contended that the order under Section 73(9) was passed without any personal hearing, violating the principles of natural justice. It was argued that the filing of a late response demonstrated the petitioner’s intent to defend its position, and that the authorities had a statutory obligation under Section 75(4) to afford a hearing irrespective of the timeliness of the response. Reliance was placed on the mandatory language of the provision and the doctrine of audi alteram partem.
For the Respondent
The State, through Mr. Pradip Sarkar, acknowledged that no hearing was granted. However, it argued that since the petitioner failed to respond within the prescribed time, the authorities were justified in concluding the proceedings without further opportunity. It was contended that the communication dated 21.12.2023 served as sufficient notice and that the petitioner’s delay amounted to waiver of rights.
The Court's Analysis
The Court undertook a detailed examination of Section 75(4) of the CGST Act, which states: "The proper officer shall, before passing an order under sub-section (9) of section 73, give the person chargeable with tax an opportunity of being heard."
"It was the obligation of the proper officer irrespective of whether any response was filed by the petitioner, to provide an opportunity of hearing to the petitioner/assessee before determination of liability since, in the instant case, an adverse decision was contemplated."
The Court rejected the State’s argument that non-response equated to waiver. It held that Section 75(4) imposes a non-discretionary duty on the tax officer. The provision does not condition the right to hearing on timely compliance; it is an independent safeguard against arbitrary adjudication. The Court emphasized that the statutory mandate is not a formality but a substantive right designed to ensure fairness.
The Court further noted that the communication dated 21.12.2023, sent by post and not available on the portal, could not substitute for a formal hearing. The absence of portal access due to cancelled registration further undermined any claim of procedural adequacy.
The Court also observed that the petitioner’s late filing of Form GST DRC-06, though procedurally defective, indicated a bona fide attempt to participate in the process. Denying a hearing on that basis would render the statutory right illusory.
The Verdict
The writ petition was allowed. The Court set aside the order dated 29.12.2023 passed under Section 73(9) of the CGST Act. The petitioner’s GST registration was directed to be restored solely for the purpose of enabling access to the portal and participating in the fresh hearing. The portal shall remain active for 90 days beyond the date of the new order under Section 73(9). The petitioner shall file its response to the second show cause notice within 15 days of being intimated of portal activation. The authorities shall conduct a fresh hearing in accordance with Section 75(4) and pass a reasoned order.
What This Means For Similar Cases
Hearing Is Mandatory, Not Discretionary
- Practitioners must insist on compliance with Section 75(4) even when clients miss deadlines
- Late responses do not extinguish the right to hearing - the obligation is statutory and absolute
- Tax officers cannot treat non-response as implied consent to adverse orders
Registration Restoration Is a Procedural Necessity
- Where registration is cancelled, authorities must restore it temporarily to enable portal access for hearing
- Denial of portal access during proceedings violates the right to be heard
- Courts will intervene to ensure functional access to digital systems as part of natural justice
Documentation Must Be Portal-Accessible
- Communications sent only via post, without portal upload, are insufficient for digital tax regimes
- All notices, reminders, and hearing intimations must be available on the GST portal to satisfy due process
- Failure to upload may render proceedings voidable, even if physical delivery occurred
