The Patna High Court has reiterated that a personal hearing under Section 75(4) of the GST enactments is a statutory safeguard that cannot be bypassed while completing an assessment. In this case, the petitioner challenged a GST assessment and consequential demand on various grounds, including limitation and denial of a personal hearing. While the Court noted that the limitation argument already stood answered against the petitioner in an earlier batch of cases, it found merit in the grievance about the absence of a personal hearing. As a result, the Court set aside the assessment and demand and remanded the matter to the Assessing Officer with clear timelines for fresh proceedings.
Simplified Explanation of the Judgment
This writ petition arose from a GST assessment in which the assessing authority had finalized the tax demand without first providing the taxpayer (the petitioner) an opportunity of personal hearing. Under Section 75(4) of the Central and State GST enactments, when an adverse decision is contemplated, the assessee must be given a chance to be heard. The Court treated this requirement as a statutory mandate—meaning it is not optional—and evaluated whether the assessment complied with it. The petitioner also argued that the proceedings were barred by limitation, but that issue had already been settled against similarly placed assessees in a recent decision of the Court.
The Bench, speaking through the Hon’ble Chief Justice, recorded that the contention on limitation stood concluded by its earlier judgment delivered on 27 November 2024 in C.W.J.C. No. 4180 of 2024 (M/s Barhonia Engicon Private Limited v. Union of India & Ors.) and connected matters. Therefore, the limitation plea was rejected for the present petitioner as well. That brought the focus squarely on whether the assessment could survive despite the alleged violation of Section 75(4).
On examining the record and submissions, the Court accepted that no personal hearing had in fact been granted before passing the impugned assessment order dated 04 December 2023 and the consequential demand dated 18 December 2023. The Court treated this omission as a violation of the statutory mandate. Consequently, both orders were set aside. Rather than deciding the merits of the assessment itself, the Court restored the matter to the original stage and remitted it to the Assessing Officer for a fresh decision after giving the petitioner a full and fair opportunity of hearing.
Importantly, the Court did not leave the timeline open-ended. It directed the petitioner to appear before the Assessing Officer on 19 December 2024, with liberty for one adjournment if necessary. The Assessing Officer, in turn, has been instructed to pass a fresh order within three months from the date of the judgment, or within the statutory limitation period if that ends later—whichever happens later. These directions are aimed at ensuring that both sides move quickly to a lawful and final determination, while preserving the petitioner’s right to be heard.
What this means in practical terms is that the case is not over; it is reset. The earlier assessment and demand no longer exist because they were tainted by procedural illegality. The taxpayer must now appear on the specified date. The Assessing Officer must then issue a hearing notice, listen to the taxpayer’s submissions, consider documents, and only then pass a reasoned order under the GST law. If these steps are followed, the resulting order—whether favourable or adverse—will be far less vulnerable to challenge on procedural grounds.
The decision is especially significant in the GST context. While the legislature has created strict timelines and robust enforcement mechanics for tax administration, those measures are not meant to eclipse base-level procedural fairness. Section 75(4) is the statutory expression of that fairness: a safeguard designed to prevent surprise assessments and to ensure that taxpayers can clarify factual issues, address proposed variations, and point out legal errors before an assessment crystallizes. By insisting on adherence to Section 75(4), the Court has reinforced that compliance culture applies equally to the tax department and the taxpayer.
Another noteworthy aspect is the Court’s careful separation of issues. The limitation defence was foreclosed by the Court’s earlier decision (binding precedent), so the Bench did not revisit that terrain. Instead, it focused on the hearing requirement and resolved the case on that narrower, yet decisive, ground. This approach ensures consistency across similar cases on limitation while also signalling that even when limitation favours the department, assessments must still satisfy the minimum standard of procedural fairness.
Finally, the Court’s directions provide a workable template for similar remand cases: fix a specific attendance date, allow one adjournment, and set an outer time limit for the fresh order. This balances administrative efficiency with fairness. Taxpayers benefit from a guaranteed opportunity to present their case; the department benefits from a definitive schedule to bring the matter to closure.
Significance or Implication of the Judgment (For general public or government)
For taxpayers:
This decision underscores that a personal hearing is not a mere formality in GST assessments. If you receive a show-cause or draft assessment proposing an adverse outcome, you are entitled to ask for (and receive) a personal hearing. If a final order is passed without it, that order can be set aside on procedural grounds—though the matter will likely be remitted for fresh consideration. Timely appearance and complete documentation at the remand stage are essential to achieve a fair outcome.
For the tax department:
The ruling serves as a reminder to institutionalize a robust hearing protocol under Section 75(4): issue clear notices, record attendance, allow effective oral submissions, and reflect those submissions in a reasoned order. Doing so not only complies with statutory requirements but also reduces avoidable litigation where orders are otherwise vulnerable to being quashed for procedural lapses.
For the system:
By aligning enforcement with fairness, the Court’s approach promotes better-quality assessments and public confidence in GST adjudication. The structured remand directions ensure expeditious disposal while preserving the taxpayer’s right to be heard.
Legal Issue(s) Decided and the Court’s Decision with reasoning
- Whether the petitioner’s limitation plea could defeat the assessment proceedings
Decision: No. The Court held that the limitation contention stood concluded against the petitioner by its earlier judgment in C.W.J.C. No. 4180 of 2024 (M/s Barhonia Engicon Private Limited v. Union of India & Ors., decided on 27.11.2024) and analogous cases. - Whether the assessment and consequential demand could stand when passed without granting a personal hearing under Section 75(4) of the GST enactments
Decision: No. The Court found a violation of the statutory mandate for a personal hearing; it therefore set aside the assessment order dated 04.12.2023 and the consequential demand dated 18.12.2023, and remitted the matter to the Assessing Officer for fresh adjudication after hearing the assessee. - What directions were appropriate upon remand
Decision: The Court directed the assessee to appear before the Assessing Officer on 19.12.2024 (with liberty for one adjournment). The Assessing Officer must pass a fresh order within three months from the date of judgment or within the statutory limitation, if that ends later—whichever occurs 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 (relied upon to reject the petitioner’s limitation plea).
Case Title
M/S Nishant Enterprises (2017-2018) GSTIN-10AGAPD0206H1ZL through its Proprietor Smt. Reena Devi v. Union of India & Ors.
Case Number
Civil Writ Jurisdiction Case No. 14016 of 2024; Date of Judgment: 28.11.2024.
Coram and Names of Judges — Always prefix with Hon’ble
- Hon’ble the Chief Justice (K. Vinod Chandran, CJ)
- Hon’ble Mr. Justice Partha Sarthy
Names of Advocates and who they appeared for
- Mr. Bijay Kumar Gupta, Advocate — for the petitioner
- Mr. Manish Kumar, Advocate — for the petitioner
- Dr. K.N. Singh, ASG — for the Union of India (respondents)
- Mr. Anshuman Singh, Sr. Standing Counsel, CGST & CX — for the department (respondents)
- Mr. Vivek Prasad, GP-7 — for the State of Bihar (respondents)
Link to Judgment
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