🧾 “Natural Justice for the Assessee” – Madras High Court Reinforces Personal Hearing Mandate Under GST

📌 Case Overview

• Case Name: Tvl. PVK Constructions vs. Union of India & Others

• Court: Madras High Court (Madurai Bench)

• W.P. (MD) Nos.: 3728 to 3732 of 2025

• Date of Judgment: February 17, 2025

• Presiding Judge: Justice Vivek Kumar Singh

• Key Provision: Section 75(4) of the CGST Act, 2017

🧾 Background

Tvl. PVK Constructions, a proprietorship engaged in construction services, was subjected to a surprise inspection by GST authorities on January 12, 2024. Subsequently, a Show Cause Notice (SCN) was issued on June 14, 2024, alleging discrepancies in Input Tax Credit (ITC) claims and turnover reporting. A personal hearing was scheduled for August 16, 2024.Indian Kanoon+4CaseMine+4Indian Kanoon+4

The petitioner requested an adjournment on August 1, 2024, seeking additional time to prepare a detailed response. However, without considering this request, the assessing officer passed an order on August 23, 2024, confirming the demands proposed in the SCN. A subsequent rectification application filed by the petitioner was also rejected on January 13, 2025.CaseMine

⚖️ Legal Issue

Did the assessing officer violate the principles of natural justice by passing an order without granting a personal hearing, as mandated under Section 75(4) of the CGST Act?

🧑‍⚖️ Court's Observations

1. Mandatory Personal Hearing: The court emphasized that Section 75(4) of the CGST Act mandates an opportunity for a personal hearing if requested by the assessee or if an adverse decision is contemplated.

2. Violation of Natural Justice: The assessing officer's failure to consider the petitioner's request for an adjournment and proceeding to pass the order without a personal hearing constituted a breach of natural justice principles.

3. Inconsistency in Rectification Applications: The court noted that while a similar rectification application for a previous assessment year was allowed, the application for the current year was rejected without adequate reasoning, indicating inconsistency in the department's approach.CaseMine

🧾 Judgment

The Madras High Court set aside the impugned orders dated August 23, 2024, and January 13, 2025. The matter was remanded to the assessing officer with directions to:CaseMine+1SAG Infotech Official Blog+1

• Allow the petitioner to submit a detailed reply along with supporting documents within one week.

• Provide a personal hearing to the petitioner.

• Pass a reasoned and speaking order within three weeks thereafter.CaseMine

💡 Key Takeaways

• Adherence to Natural Justice: Tax authorities must strictly adhere to the principles of natural justice, ensuring that assessees are granted a fair opportunity to present their case.

• Mandatory Personal Hearing: Under Section 75(4) of the CGST Act, a personal hearing is not discretionary but mandatory when an adverse decision is contemplated.

• Consistency in Decision-Making: Tax authorities should maintain consistency in their decisions, especially when dealing with similar issues across different assessment years.

📝 Conclusion

This judgment reinforces the importance of procedural fairness in tax assessments. Tax authorities must ensure that assessees are given a genuine opportunity to be heard, and any deviation from this can render the assessment orders invalid.