The goods and services tax regime was introduced in the year 2017, replacing the fragmented system of taxation including VAT, service tax, excise duty, entertainment tax, and octroi in India. It was implemented through 101st Amendement in the Indian Constitution laying down major changes in the country’s taxation system.
The requirement of personal hearing under Section 75(4) is a statutory manifestation of the principle of natural justice “Audi Alteram Partem” meaning “No one should be condemned unheard” which lies at the heart of administrative and quasi judicial decisions, reinforcing the taxpayer’s right to a fair and meaningful opportunity of being heard before an adverse decision is rendered.
Section 75(4)- (4) 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 proceedings under gst result in adverse civil consequences including determination of tax, interest and penalty and consequential recovery, adherence to the principles of natural justice assumes paramount importance. Section 75(4) opertionalizes this doctrine by mandating personal hearing to the taxpayer whenever any written request for the same has been made by the taxpayer or any adverse decision is contemplated against them. Thus the provision is not merely procedural in nature but serves as an essential safeguard against arbitrary exercise of power by the departmental authorities and providing a fair opportunity must not be a mere empty formality and a fair chance of representing themselves must be provided to the taxpayer.
Despite the apparent clarity of the provision, several assessment orders came to be passed without affording an adequate opportunity to the taxpayer leading to an increase in litigation involving section 75(4) and thus increased interference of the high courts. Judicial interpretation over the years has evolved Section 75(4) from being viewed as a procedural formality into an indispensible safeguard of natural justice.
The significance of natural justice in GST proceedings was recognized by the Supreme Court in Radha Kishan Industries v. State of Himachal Pradesh, Civil Appeal No.1155 of 2021 wherein the Court reiterated violation of the principles of natural justice constitutes a recognized exception to the rule of alternative remedy. The decision provides an important constitutional backdrop to the statutory requirement of personal hearing under Section 75(4) of the CGST Act.
Personal Hearing is not an empty formality
The Delhi High Court comprehensively examined the scope of Section 75(4) where the department sought to justify its action of providing personal hearing by contending that a telephonic conversation with the taxpayer constituted sufficient compliance with the statutory requirement. However rejecting the contention the Delhi High Court on 24.07.2023 in M/s Jupiter Exports v. Commissioner of GST , W.P.(C) 6673/2021 & CM APPL. 21011/2021 vide emphatically held that the provision cannot be reduced to mere formality and brief telephonic conversations cannot substitute mandatory personal hearing.
Personal Hearing Must Culminate in a Reasoned Order
The requirement of personal hearing extends to due consideration of the submissions made by the taxpayer. In Hudson Insurance Brokers Pvt. Ltd. v. Union Territory of Chandigarh &Ors., CWP 8559 of 2026, The Punjab and Haryana High Court has held that the assessing authority is bound to consider the taxpayer’s reply and also provide reasons for rejecting the reply of the taxpayer and then pass an appropriate order. Failure to do so results in a non-speaking order being passed by the authorities, which is violative of the principles of natural justice and hence is not sustainable.
Selection of “No” in Form GST DRC-06 does not amount to waiver of statutory right to personal hearing
A commonly observed issue involves situations where the departmental authorities tend to dispense the obligation of providing personal hearing where “No” is selected by the taxpayer in FORM DRC-06. However the Gujrat High Court on 02.04.2026 in Komal Jayeshbhai Hemavat v. State of Gujrat, Special Civil Application No. 6209 of 2024, rejected this approach and reaffirmed the mandatory nature of the section, specifically quoting “the option of no personal hearing taken by the petitioner, cannot override the effect of mandate given by the statutory provision in Section 75(4) of the GST Act.” and thus quashing the order-in-original and remanded the matter back to the adjudicating authority for de novo consideration.
Where SCN shows “NA” in Personal Hearing Column
The Punjab and Haryana High Court has consistently held that the mandatory nature of providing personal opportunity cannot be simply waived off by the department by issuing a Show Cause Notice in which the particulars related to date, time and venue of personal hearing are marked as NA (Not Applicable). This shows that the authorities deliberately chose not to provide an opportunity to the taxpayer despite an adverse decision being taken against him which is completely against the statutory mandate of Section 75(4)
In Kemexxel E Commerce Pvt. Ltd. v. State of Punjab CWP 33977 of 2025 and subsequently in Parv Alloys & Metals v. Union of India, CWP 13039 of 2026, the Hon’ble Punjab and Haryana High Court held that mentioning “NA” against the date, time and venue of personal hearing in the Show Cause Notice is contrary to the mandate of Section 75(4). The court ruled that this would lead to quashing of the subsequent proceedings as well when the notice itself denies an opportunity to the taxpayer.
Ultimately, Section 75(4) embodies natural justice in GST adjudication, requiring not merely an opportunity of hearing, but a meaningful, effective and reasoned consideration of the taxpayer.
Submitted by
Ridhie Sharma