Facts of the Case

The petitioner, Kuehne Nagel Private Limited, is engaged in freight forwarding, clearance, logistics and warehousing, with its registered office in New Delhi and a branch office in Mumbai. On 5.1.2021 respondent no.3 issued a notice for audit of its books for 2017-18; discrepancies were communicated on 2.9.2022 and a Final Audit Report in Form ADT-02 followed on 19.10.2022. On 7.6.2023, respondent no.3 issued a show cause notice with a summary order in Form GST DRC-01 demanding tax of Rs.6,19,77,291 along with interest of Rs.6,50,76,155 and penalty. The petitioner sought a 30-working-day extension on 11.7.2023 and filed its reply on 23.8.2023, but respondent no.3 had already passed an ex-parte order on 18.8.2023 raising a demand of Rs.4,65,26,248 in tax, Rs.5,02,48,348 in interest and Rs.46,52,625 in penalty under the Central Goods and Services Tax Act, 2017.

Issues Involved

  1. Whether the ex-parte order dated 18.8.2023 violated the petitioner's right to a personal hearing under Section 75(4) of the CGST Act.
  2. Whether an inadvertent "No" tick-mark on the personal-hearing option, alongside an express written request for a hearing, amounts to waiver of that right.
  3. Whether the writ petition was maintainable despite the availability of an alternate statutory appeal.

Petitioner's Arguments

  • The show cause notice itself recorded "NA" against the date of personal hearing, effectively denying any hearing date.
  • In its reply dated 11.7.2023, the petitioner had explicitly requested a personal hearing before any decision was taken.
  • Despite this express request, the order was passed without granting any hearing, in violation of Section 75(4) of the CGST Act.
  • Contended the order was contrary to principles of natural justice and liable to be set aside on that ground alone.

Respondent's Arguments

  • Pointed out that although the petitioner's reply requested a personal hearing in text, the petitioner had ticked the box for personal hearing as "No," and therefore no hearing was granted.
  • Argued that the impugned order was an appealable order and the petitioner should be relegated to the alternate remedy of appeal rather than have the writ entertained.

Court Order/Findings

  • Held that a holistic reading of the reply showed an inadvertent tick-marking error, since the same letter expressly requested a personal hearing — this was not a case of the petitioner waiving its right to a hearing.
  • Held that Section 75(4) of the CGST Act obliges the adjudicating officer to grant a hearing wherever a written request is received or an adverse decision is contemplated, and a mechanical reliance on a tick-box cannot override an express textual request for hearing.
  • Found the impugned order breached natural justice and was ex facie contrary to Section 75(4), which itself justified entertaining the writ despite the alternate appellate remedy.
  • Quashed the order dated 18.8.2023 and directed respondent no.3 to grant an opportunity of personal hearing and pass a fresh order within four weeks.

Important Clarification

  • A written request for personal hearing embedded in a reply to a show cause notice prevails over an inconsistent tick-box selection on the same document.
  • Section 75(4) casts a mandatory obligation on adjudicating officers to grant a hearing wherever requested in writing or wherever an adverse order is contemplated — it is not a discretionary courtesy.
  • Availability of a statutory appeal does not bar a writ petition where the order under challenge is itself vitiated by breach of natural justice.

Sections Involved

  • Section 75(4) of the Central Goods and Services Tax Act, 2017 – mandates an opportunity of hearing where requested in writing or where an adverse decision is contemplated.
  • Section 75(5) of the Central Goods and Services Tax Act, 2017 – governs adjournment of hearings on sufficient cause, capped at three adjournments.

Decision – In Favour of

The order is in favour of the Assessee. The ex-parte demand order was quashed and the matter remanded for a fresh order after personal hearing.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Judicature at Bombay
  • Case No.: Writ Petition No. 15210 of 2023
  • CNR: Not available on record
  • Coram: G. S. Kulkarni and Jitendra S. Jain, JJ.
  • Decision Date: 06.12.2023
  • Disposal Nature: Allowed

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