Facts of the Case

Palak International filed a writ petition before the High Court of Punjab and Haryana challenging an assessment order dated 28.08.2024 passed against it under the Goods and Services Tax Act, 2017. Though the petition raised several grounds, counsel confined the challenge to the sole issue that the order was passed without affording an opportunity of personal hearing, in violation of principles of natural justice. Appearing for the State of Punjab, the Additional Advocate General fairly conceded that no personal hearing had in fact been granted before the impugned order was passed, and stated that fresh orders would be passed after affording due opportunity of hearing. The Bench, comprising the Acting Chief Justice and Justice Rohit Kapoor, disposed of the matter on 07.08.2026 by following the mandate of Section 75(4) of the Act and a coordinate Division Bench ruling on an identical issue.

Issues Involved

  1. Whether an assessment order passed without affording an opportunity of personal hearing, as mandated by Section 75(4) of the GST Act, violates principles of natural justice.
  2. Whether such an order can be sustained once the revenue itself concedes the procedural lapse.
  3. What consequential directions should follow when an order is set aside solely on this ground.

Petitioner's Arguments

  • The impugned assessment order dated 28.08.2024 was passed without granting any opportunity of personal hearing, contrary to the mandatory requirement of Section 75(4) of the GST Act, 2017.
  • Section 75(4) obliges the adjudicating authority to grant a hearing whenever an adverse decision is contemplated, regardless of whether a written request for hearing was made by the assessee.
  • Denial of hearing is a fatal breach of natural justice that vitiates the order in its entirety and warrants it being set aside rather than relegating the petitioner to an appellate remedy.
  • Reliance was placed on the coordinate Division Bench ruling in Kemexel Ecommerce Pvt. Ltd. v. State of Punjab, where an identical defect led to the assessment order being quashed with liberty to proceed afresh.

Respondent's Arguments

  • Learned AAG for the State of Punjab fairly and candidly conceded that no opportunity of personal hearing had been afforded to the petitioner before the impugned order was passed.
  • The State did not defend the order on merits and instead undertook that fresh orders would be passed after granting due opportunity of hearing to the petitioner.

Court Order / Findings

  • The Bench noted that Section 75(4) of the GST Act, 2017 mandates that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.
  • Since the revenue admitted non-compliance with this mandatory safeguard, the Court held that failure to afford a personal hearing before passing an adverse order renders the order under Section 75(4) unsustainable, following its own coordinate Bench decision in Kemexel Ecommerce Pvt. Ltd. v. State of Punjab.
  • The impugned assessment order dated 28.08.2024 (Annexure P/4) was accordingly set aside.
  • Liberty was granted to the revenue to proceed afresh against the petitioner strictly in accordance with law, including compliance with Section 75(4).
  • All pending miscellaneous applications, if any, were also disposed of.

Important Clarification

  • Section 75(4) is not a mere formality — it creates a mandatory right to a personal hearing whenever an adverse decision is contemplated, even absent a specific written request from the taxpayer.
  • Non-compliance with Section 75(4) alone is sufficient ground to set aside a GST adjudication order, without the Court examining the substantive tax demand on merits.
  • Setting aside on this ground does not foreclose the revenue's power to re-adjudicate; it only requires that re-adjudication follow due process, including a proper hearing.

Sections Involved

  • Section 75(4), CGST Act, 2017 — mandates that an opportunity of hearing be granted before any adverse decision on tax or penalty, whether or not the assessee has specifically requested one.
  • Article 226, Constitution of India — invoked to seek writ relief against the assessment order on the ground of violation of natural justice.

Decision – In Favour of

Decided in favour of the assessee. The impugned assessment order was set aside for breach of the mandatory personal hearing requirement under Section 75(4), though the revenue retains liberty to re-adjudicate the matter after affording a proper hearing.

Case Details

Court: High Court of Punjab and Haryana at Chandigarh
Case No.: CWP-24548-2026 (O&M)
Coram: Hon'ble the Acting Chief Justice Ashwani Kumar Mishra and Hon'ble Mr. Justice Rohit Kapoor
Date of Decision: 07.08.2026

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