Facts of the Case

M/s Nexus IT World, a partnership firm, challenged the Adjudication Order dated 08.10.2025 passed by the Assistant Commissioner of Commercial Taxes. The impugned adjudication order described itself as an ex parte decision.

However, the records before the High Court showed that, after issuance of the Show Cause Notice in GST DRC-01, the petitioner had filed a reply along with certain documents. The petitioner had also sought a personal hearing. Although an opportunity of personal hearing was extended, the petitioner did not avail the same.

The material aspect noticed by the High Court was that the impugned adjudication order did not refer to or consider the reply submitted by the petitioner or the documents filed along with such reply.

The petitioner therefore sought quashing of the adjudication order and remand of the proceedings for fresh adjudication on merits after affording an effective and meaningful opportunity of personal hearing.

Issues Involved

  1. Whether an ex parte GST adjudication order can legally survive when the taxpayer had already filed a reply and supporting documents in response to GST DRC-01, but the adjudicating authority failed to consider them.
  2. Whether the petitioner’s failure to avail the earlier opportunity of personal hearing could justify the adjudicating authority overlooking the written reply and documents already available on record.
  3. Whether liability could be fastened upon the petitioner without consideration of the material submitted in response to the Show Cause Notice.
  4. Whether the adjudication proceedings were required to be restored to the respondent for reconsideration with another opportunity of personal hearing.

Petitioner’s Arguments

The petitioner challenged the Adjudication Order dated 08.10.2025 and sought its quashing.

The petitioner’s case, as emerging from the record considered by the High Court, was that a reply had been filed in response to GST DRC-01 along with supporting documents and that a personal hearing had also been sought.

The grievance was that, despite the reply and documents being on record, the impugned adjudication order did not refer to or consider those materials.

Accordingly, the petitioner sought restoration of the matter for fresh adjudication on merits after being afforded an effective and meaningful opportunity of personal hearing in accordance with law.

Respondent’s Arguments

The respondent was represented by the learned High Court Government Pleader, who was called upon to accept notice for the respondent.

The record showed that an opportunity of personal hearing had been extended to the petitioner, but the petitioner had not availed that opportunity.

However, notwithstanding the non-availment of the personal hearing, the High Court examined whether the adjudication order could legally stand when it failed to consider the petitioner’s reply and documents already filed in response to GST DRC-01.

Court Order / Findings

The High Court held that the respondent was under an obligation to consider the materials filed by the petitioner in response to GST DRC-01 before fastening any liability upon the petitioner.

The Court specifically found that the respondent could not have passed the adjudication order by overlooking the petitioner’s response and the documents filed along with it.

The High Court answered in the negative the question whether the impugned order could pass muster in law merely because the petitioner had not availed the opportunity of personal hearing.

Accordingly, the High Court:

  • Allowed the writ petition in part.
  • Quashed the Adjudication Order dated 08.10.2025.
  • Restored the proceedings to the respondent for reconsideration.
  • Directed the petitioner to appear before the respondent on 29.06.2026 without further notice.
  • Directed the respondent to decide the matter after extending another opportunity of personal hearing to the petitioner.

Important Clarification

The significant clarification arising from the order is that failure to avail an opportunity of personal hearing does not permit the adjudicating authority to ignore a written reply and supporting documents already filed in response to GST DRC-01.

Where a taxpayer’s reply and documentary materials are available on record, those materials must be considered before liability is fastened. An adjudication order that overlooks such response and documents may fail to withstand judicial scrutiny, even where the taxpayer did not avail the earlier personal hearing opportunity.

The High Court did not adjudicate the underlying tax liability on merits. Instead, it quashed the impugned adjudication order and restored the proceedings to the respondent for reconsideration after another personal hearing.

Sections / Provisions Involved

  • Articles 226 and 227 of the Constitution of India
  • GST DRC-01 – Show Cause Notice
  • GST DRC-07 – Adjudication / Summary Order reference forming part of the impugned proceedings
  • Principles governing consideration of the taxpayer’s reply and supporting documents before fastening tax liability
  • Requirement of an effective opportunity of personal hearing in adjudication proceedings

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1783068604_425compressed.pdf

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