Facts of the Case

M/S Tektronix India Private Limited challenged three orders dated 10.08.2023/11.08.2023, uploaded on the GST portal in Form GST DRC-07, pertaining to FY 2017-18, 2019-20 and 2020-21, along with three corresponding show-cause notices dated 22.05.2023 issued under Section 73 of the CGST Act, 2017 by the Deputy Commissioner of Commercial Taxes (Audit)-4.8, Bengaluru. The petitioner's case was that while a personal hearing had been granted for FY 2018-19, no such opportunity was extended for the other three financial years covered by the same proceedings. It approached the Karnataka High Court under Articles 226 and 227 of the Constitution, seeking quashing of the orders and notices and a direction for a fresh adjudicating authority to reconsider the matter after granting a hearing.

Issues Involved

  1. Whether denial of personal hearing for three of the four assessment years covered by related Section 73 proceedings, while granting it for the fourth, violates the principles of natural justice.
  2. Whether such ex parte orders warrant being quashed and remitted for fresh consideration.

Petitioner's Arguments

  • Personal hearing was granted only for FY 2018-19, while it was denied for FY 2017-18, 2019-20 and 2020-21, despite all years arising from the same set of proceedings.
  • This selective denial rendered the orders for the three years ex parte and in breach of the statutory right to a personal hearing.
  • The impugned orders and underlying notices deserved to be quashed, with the matter reassigned to a different adjudicating authority for fresh consideration.

Respondent's Arguments

  • The Deputy Commissioner, represented by the High Court Government Pleader, defended the impugned orders without disputing the factual record.
  • No specific justification was placed on record for the differential treatment of the hearing opportunity across the four financial years.

Court Order / Findings

  • On perusal of the impugned order, the Court found that personal hearing was indeed provided only for FY 2018-19, and not for the subsequent years FY 2019-20 and 2020-21, nor for the earlier year FY 2017-18.
  • The Court held that the principles of natural justice were violated and the statutory right of personal hearing was not provided for these years, making the impugned order an ex parte order to that extent.
  • The writ petition was allowed; the impugned orders (Annexures A and B) were quashed and the matter was remitted to Respondent No. 2 for fresh consideration.
  • The petitioner was directed to file its objections and appear before Respondent No. 2 on a fixed date (5th August 2025) without requiring any further notice.

Important Clarification

  • Where a single set of proceedings covers multiple financial years, the adjudicating authority must independently ensure a personal hearing for each year in which a demand is confirmed; a hearing granted for one year does not cure the omission for others.
  • Such selective denial of hearing renders the order ex parte for the affected years and is sufficient by itself to quash the order without examining the merits of the tax demand.
  • A fresh hearing before the same adjudicating authority, on a court-fixed timeline, is an adequate remedy — a change of officer is not always necessary.

Sections Involved

  • Section 73, CGST Act, 2017 — determination of tax not paid or short paid for reasons other than fraud, under which the show-cause notices and orders were issued.
  • Section 75(4), CGST Act, 2017 — mandates a personal hearing before an adverse order is passed against the taxpayer.
  • Articles 226 and 227, Constitution of India — invoked for the writ of certiorari against the impugned assessment orders.

Decision – In Favour of

The decision is in favour of the assessee. The impugned Section 73 orders for FY 2017-18, 2019-20 and 2020-21 were quashed and the matter remitted for fresh consideration after affording a proper personal hearing.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: Writ Petition No. 25426 of 2023 (T-RES); NC: 2025:KHC:25384
Coram: Hon'ble Mr. Justice Suraj Govindaraj
Date of Order: 9th July 2025

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