The Patna High Court, in a 2024 decision, clarified the mandatory nature of personal hearing before finalising a GST assessment. The Court disposed of a writ petition challenging an assessment order on two counts—limitation and violation of Section 75(4) of the GST enactments. While the Court rejected the limitation argument (by following its earlier ruling delivered a day before), it set aside the impugned assessment solely because the assessing authority had not granted a personal hearing as required by law. The matter was remanded with clear timelines for fresh adjudication.

In simple terms, the Court said: even if your legal challenge on limitation fails, you are still entitled to a real opportunity to be heard. If the tax officer does not give you that mandatory hearing, the assessment cannot stand.

The case involved a business entity (petitioner) that had been assessed under the GST regime. The petitioner argued that the assessment was time-barred and, additionally, that no personal hearing had been offered before passing the assessment order. The High Court noted that the issue of limitation had already been decided against the petitioner in a batch matter decided the previous day (C.W.J.C. No. 4180 of 2024, decided on 27.11.2024). However, the High Court accepted the second grievance and held that non-compliance with Section 75(4)—which contemplates an opportunity of personal hearing—vitiates the order.

Crucially, the Court did not enter into the merits of the tax dispute. Instead, it adopted a procedural approach: where the statute prescribes an opportunity of hearing, the authority must follow it. Therefore, the impugned order dated 29.11.2023 was set aside, and the matter was remanded to the assessing officer for a fresh decision after giving the petitioner a personal hearing on a specified date. The Court also set an outer timeline for the fresh order: within three months from the date of the judgment or within the prescribed limitation period (if still open), whichever is later. This kind of structured remand ensures that both sides get a fresh and fair opportunity without indefinite delays.

A notable aspect of the judgment is the Court’s practical guidance on scheduling. The Court directed the assessee to appear before the assessing officer on a specific date (19.12.2024). It also permitted one adjournment and thereafter required the officer to pass a speaking order within the stipulated period. This avoids unnecessary back-and-forth and reduces scope for future procedural challenges. The High Court’s approach thus balances taxpayer rights with administrative efficiency.

What does this mean for businesses and tax departments in Bihar? First, every assessee must be given a meaningful opportunity to be heard before the assessment is finalised. A mere show-cause notice, or a perfunctory opportunity that does not culminate in an actual hearing, will not suffice where the statute expects a personal hearing. Second, taxpayers should carefully check whether the department actually offered and conducted a personal hearing, especially when the case involves disputed facts, classification, input tax credit issues, or significant tax demands. If not, the assessment may be vulnerable to challenge.

On the department’s side, officers should ensure that the notice of personal hearing is properly issued, served, and documented; that the hearing actually takes place (even if virtually); and that the final order records that the personal hearing happened, who attended, what was argued, and why the officer agreed or disagreed. Orders that lack these elements invite avoidable litigation and remand.

The judgment also reflects a broader judicial trend: High Courts across India have consistently emphasised compliance with the principles of natural justice in GST adjudication, especially after the rapid digitisation of proceedings. While e-notices and online portals are efficient, they do not dilute the statutory requirement of personal hearing where the law mandates it. The Patna High Court has reaffirmed that procedural fairness is not a formality; it is a legal requirement foundational to a valid tax order.

Finally, the Court’s specific reference to the earlier day’s judgment on limitation underscores the importance of consistency and judicial discipline. By following its own precedent on limitation, the Court ensured uniformity, avoided conflicting rulings, and focused on the decisive procedural flaw—absence of a personal hearing. For litigants, this means that arguments already settled in a closely related matter may not be re-opened unless distinguishable facts or legal points exist. For tax authorities, it highlights the value of monitoring court developments and adjusting departmental action to align with binding precedent.

In summary, the 2024 Patna High Court ruling teaches three practical lessons: (1) do not overlook mandatory personal hearings; (2) structure remands with dates and deadlines to prevent delay; and (3) keep an eye on contemporaneous precedents that may clinch issues like limitation. The decision sends a clear message that procedural compliance is as critical as substantive tax determination, and that both must go hand-in-hand to sustain an assessment under GST.

Significance or Implication of the Judgment (For general public or government)

This ruling strengthens taxpayers’ rights to be heard and pushes the administration to follow due process. For the public, it clarifies that if a GST assessment is passed without a personal hearing, the order can be set aside regardless of the merits. For the government, it serves as a compliance checklist: issue hearing notices, hold actual hearings, record submissions, and pass speaking orders. This reduces litigation, improves trust in tax governance, and helps achieve finality in assessments faster. With time-bound remands, both sides benefit: taxpayers get closure, and the department can enforce demand without procedural uncertainty.

Legal Issue(s) Decided and the Court’s Decision with reasoning

• Limitation under GST
  • Issue: Whether the assessment was barred by limitation.
  • Court’s Decision: The limitation challenge failed in view of the Court’s preceding judgment in C.W.J.C. No. 4180 of 2024 and analogous matters decided on 27.11.2024. The present case followed that ruling and rejected the petitioner’s limitation plea.
  • Reasoning: Judicial consistency—once the High Court settled the limitation issue in a batch of cases a day earlier, the same view governed this petition.
• Violation of Section 75(4) (Personal Hearing)
  • Issue: Whether the assessment order could stand when no personal hearing under Section 75(4) of the GST enactments was granted.
  • Court’s Decision: The assessment order dated 29.11.2023 was set aside due to non-compliance with the statutory mandate of personal hearing; the matter was remanded to the assessing officer.
  • Reasoning: Section 75(4) contemplates a personal hearing before finalising assessment where adverse decisions are proposed. The absence of such hearing violates the law and the principles of natural justice. The Court therefore directed the assessee to appear on 19.12.2024 and required the fresh order to be passed within three months from the judgment or within the still-valid limitation, whichever is later.

Judgments Relied Upon or Cited by Court

• C.W.J.C. No. 4180 of 2024 and analogous cases, “M/s Barhonia Engicon Private Limited v. Union of India & Ors.” — judgment dated 27.11.2024 (Patna High Court) — followed on the issue of limitation.

Case Title

M/s M.D. International v. Union of India & Ors. (Patna High Court)

Case Number

Civil Writ Jurisdiction Case No. 15354 of 2024

Coram and Names of Judges — Always prefix with Hon’ble

• Hon’ble the Chief Justice K. Vinod Chandran
• Hon’ble Mr. Justice Partha Sarthy

Names of Advocates and who they appeared for

• For the petitioner: Mr. Bijay Kumar Gupta, Advocate
• For the respondents: Dr. K. N. Singh, Assistant Solicitor General (ASG)

Link to Judgment

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