Facts of the Case

M/S Woodpecker Distilleries and Breweries Private Limited, Hassan, was subjected to an audit for the period April 2021 to March 2022, following which a pre-intimation in Form GST DRC-01A dated 15.09.2025 and a show-cause notice dated 22.09.2025 under Section 73(1) of the KGST Act, 2017 were issued alleging ineligible ITC availment and misclassification of taxable supplies as exempt/non-GST supplies. The petitioner filed detailed replies on 19.09.2025 and 07.10.2025, expressly requesting a personal hearing under Section 75(4). Despite this, the adjudicating authority passed the impugned order dated 28.10.2025 without granting any personal hearing.

Issues Involved

  1. Whether an adjudication order under Section 73(9) can be sustained when personal hearing, though specifically requested under Section 75(4), was never granted.
  2. Whether the taxpayer is entitled to have its GSTR-3B classifications and ITC claims re-examined after being given a proper hearing.

Petitioner's Arguments

  • The reply dated 07.10.2025 specifically and clearly requested a personal hearing before any adverse order was passed.
  • The petitioner had not claimed ineligible ITC in its GSTR-3B and had not misclassified taxable supplies as exempt or non-GST supplies, as alleged in the show-cause notice.
  • Passing the adjudication order without affording personal hearing directly violated Section 75(4) of the KGST Act and principles of natural justice.

Respondent's Arguments

  • The Additional Government Advocate contended there was no merit in the petition, submitting that the respondent had considered the petitioner's reply and documents and had passed a well-considered order that did not warrant interference.

Court Order / Findings

  • On perusing the reply dated 07.10.2025, the Court found it clearly recorded a specific request for personal hearing which the respondent nevertheless failed to grant before passing the adjudication order.
  • The Court held that failure to grant personal hearing despite a specific request is violative not only of the principles of natural justice but also of the mandatory requirement in Section 75(4) of the KGST Act, rendering the adjudication order unsustainable.
  • The order dated 28.10.2025 was set aside and the matter remitted to the respondent for fresh consideration in accordance with law, with liberty to the petitioner to file additional pleadings and documents.
  • The petitioner was directed to appear before the respondent on a fixed date without awaiting further notice, failing which the order would stand automatically recalled and the writ petition revived.

Important Clarification

  • A specific written request for personal hearing under Section 75(4) of the GST Act obliges the adjudicating authority to actually grant one before passing an adverse order; silent consideration of the written reply alone is not sufficient compliance.
  • Even where an audit-based show-cause notice is otherwise procedurally regular, skipping the personal hearing stage after a request is made is fatal to the resultant order.

Sections Involved

  • Section 73(1)/(9), KGST/CGST Act, 2017 – show-cause and adjudication for tax short paid, no fraud alleged.
  • Section 75(4), KGST Act, 2017 – mandatory personal hearing on request or where an adverse decision is contemplated.
  • Form GST DRC-01A – pre-show-cause intimation under Rule 142(1A).

Decision – In Favour of

The decision is in favour of the assessee, Woodpecker Distilleries and Breweries Private Limited — the adjudication order was set aside and the matter remitted for fresh consideration with a proper hearing.

Case Details

High Court of Karnataka at Bengaluru – WP No. 38171 of 2025 (T-RES) – Neutral Citation: 2025:KHC:54378 – Coram: Hon'ble Mr. Justice S.R. Krishna Kumar – Order dated 17.12.2025.

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