Facts of the Case

The petitioner challenged an order passed by the Assessing Officer (respondent No.1) in Form GST DRC-07 vide Reference No.1/IGST, dated 14.12.2020, relating to the tax periods 04/2018 to 03/2019 under the Integrated Goods and Services Tax Act, 2017. A show cause notice dated 02.06.2020 had preceded the order, and the petitioner pointed out a variation between the amount indicated in that notice and the amount ultimately confirmed in the impugned order. A notice for personal hearing dated 13.10.2020 was issued to the petitioner; however, on the date fixed, the Assistant Commissioner merely directed the petitioner to produce documents for verification and did not fix any further date for hearing. No personal hearing was thereafter granted before the adverse order was passed. Aggrieved, the petitioner approached the High Court of Andhra Pradesh under Article 226 of the Constitution of India, contending that the order violated Section 75(4) of the IGST/APGST Acts, 2017, and Section 75(4) was contrary to the principles of natural justice.

Issues Involved

  1. Whether an opportunity of personal hearing was mandatorily required to be granted to the petitioner under Section 75(4) of the GST Acts before passing the impugned adverse order.
  2. Whether the failure to grant such hearing, coupled with the variation between the show cause notice and the final order, vitiated the order in Form GST DRC-07.

Petitioner's Arguments

  • No opportunity of personal hearing was given, as contemplated under Section 75(4) of the IGST/APGST Act, 2017, before the adverse order was passed.
  • There was a variation between the amount shown in the show cause notice dated 02.06.2020 and the amount confirmed in the impugned order.
  • The matter ought to be remanded for fresh decision after affording an opportunity of hearing.

Respondent's Arguments

  • The Government Pleader for Commercial Tax contended that Section 75(4) of the APGST Act contemplates a hearing only where a specific request for hearing is made by the taxpayer.

Court Order / Findings

  • The Court held that Section 75(4) requires a hearing to be granted either where a written request is received from the taxable person, or where any adverse decision is contemplated against such person.
  • A notice for personal hearing dated 13.10.2020 had indeed been issued, but on that date the Assistant Commissioner only called for documents and never fixed any actual hearing date.
  • Since an adverse order was passed without granting any personal hearing, the Court found a clear violation of Section 75(4) of the APGST Act.
  • Finding the order liable to be set aside on this ground alone, the Court did not consider it necessary to examine the other contentions raised.
  • The Writ Petition was allowed, the impugned Form GST DRC-07 order dated 14.12.2020 was set aside, and the matter was remanded to respondent No.1 for fresh consideration after giving notice of personal hearing to the petitioner.

Important Clarification

  • Section 75(4) obliges the tax authority to grant a personal hearing not only when the taxpayer specifically requests one, but also whenever the authority contemplates passing any adverse decision against the person concerned.
  • Merely issuing a notice fixing a date for producing documents, without ever fixing a genuine hearing date, does not satisfy the mandatory requirement of personal hearing under Section 75(4).

Sections Involved

  • Section 75(4), Central Goods and Services Tax Act, 2017 / Andhra Pradesh Goods and Services Tax Act, 2017 – mandates a personal hearing where requested or where an adverse decision is contemplated.
  • Integrated Goods and Services Tax Act, 2017 – governing statute under which the impugned demand in Form GST DRC-07 was raised.
  • Article 226, Constitution of India, 1950 – writ jurisdiction invoked to challenge the order for breach of natural justice.

Decision – In Favour of

The decision is in favour of the Assessee/Petitioner. The Andhra Pradesh High Court set aside the IGST Form GST DRC-07 order for violation of the mandatory personal hearing requirement under Section 75(4) and remanded the matter for fresh adjudication after affording a proper hearing; the Court did not decide the underlying tax dispute on merits.

Related Case Laws

No related case laws on this specific issue are available on this site at present.

Case Details

  • Court: High Court of Andhra Pradesh
  • Case No.: Writ Petition No.8768 of 2022
  • Coram: Justice C. Praveen Kumar and Justice V. Sujatha
  • Date of Order: 22.04.2022

Link to Download the Order

Download the full judgment (PDF)

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