TaxTMI 
TaxTMI 
Section 75 (4) reads as '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'. The words used are simple and personal hearing is a must when either a request is there or any adverse decision is contemplated. It goes without saying that when request is also there and tax is also contemplated adversely against the replies, it must be doubly ensured that personal hearing opportunity is granted without fail.
Table 1.
S No | Situation | Personal Hearing |
1 | Request for personal hearing in writing | MUST |
2 | Adverse decision is contemplated | Must |
3 | Both 1 and 2 as above | Mandatory |
4 | Request for PH waived and no adverse order contemplated | Desirable in the interest of justice. |
Under the above legal settled position, the Madhya Pradesh High Court (Division Bench) had an occasion on 16/06/2026 as reported in M/s Shreenath Logistics Versus State of Madhya Pradesh And Others - 2026 (7) TMI 146 - MADHYA PRADESH HIGH COURT wherein personal hearing was not granted despite a specific request in writing.
The story: A composite show cause notice covering 2017-18 till 2022-23 was issued on the taxpayer under section 74 on 16/05/2024. The taxpayer furnished detailed reply on 05/10/2024 requesting for a personal hearing as well, before deciding the issues. The GST officer passed the order in original on 25/03/2026 confirming a total demand of 429 lakhs after the permissible limit for passing such order without affording the opportunity of personal hearing as requested.
It is observed that there are several violations in the entire proceedings as tabled below.
Table 2.
No | Violations |
1 | Single SCN for multiple financial years is impermissible as decided by high courts. |
2 | For 2017-18, time line for SCN was 30/06/2023 as decided by high courts. SCN was issued on 16/05/2024. |
3 | For 2017-18, OIO must be passed on or before 31/12/2023. OIO was passed only on 25/03/2026 |
4 | For 2018-19, under section 74 time limit for OIO was up to 31/12/2024. OIO was passed only on 25/03/2026. |
5 | Even for 2019-20, last date for OIO was 31/12/2025 whereas order was passed on 25/03/2026 only. |
The high court has examined at length the requirements to comply with section 75 (4) and made the observations as '7. Before dealing with rival contentions, it is apposite to quote Section 75 (4) of GST Act which reads as under:'(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.' (Emphasis supplied).
8. A plain reading of sub-section 4 of Section 75 of the Act makes it crystal clear that 'opportunity of hearing' must be granted in two situations viz (a) where a request in specific is received in writing from the person chargeable; (b) where any adverse decision is contemplated against such person.
9. This is trite that when language of statute is plain and unambiguous, it should be given effect to irrespective of its consequences. (See Nelson Motis Versus Union Of India And Another - 1992 (9) TMI 355 - Supreme Court).'
The division bench has accordingly set aside the composite order dated 25/03/2026 and remanded the matter with directions to post the case to a different officer. the opportunity of personal hearing to be allowed and matter to be decided fresh in accordance with law.
Observations: It appears that the show cause notice was issued invoking section 74 whereas in the absence of access to SCN, it is not clear as to whether the SCN was issued in strict compliance with instructions dated 13/12/2023 as SCN was issued much later in May 2024 only. It is also to be examined that the time line extensions for filing annual return under GST are not extending the deadlines for SCN as well as OIO as decided by high courts recently. Assuming that the SCN was issued purely based on GST Return differences or errors committed by taxpayer which are inadvertent in nature, section 74 is not applicable. As the show cause notice was issued on 16/05/2024, the years those could be covered under SCN under section 73 is 2020-21, 2021-22 and 2022-23 only. The taxpayer may argue on the above lines to minimize the demand amount.
Conclusion: The operative portion of the order are contained in paras 9 and 10 which read as '9 . In view of the aforesaid, and considering the admitted position that no opportunity of personal hearing was afforded to the petitioner, the decision making process adopted by the respondents stands vitiated and is contrary to the principles of natural justice as well as the mandatory requirement contained in sub-section (4) of Section 75 of the GST Act.
10. As a result, the impugned order dated 25.3.2026 (Annexure-P/6) is set aside. The respondents shall provide an opportunity of hearing to the petitioner by some other officer than the officer who has issued the show cause notice to the petitioner and thereafter to pass final order, in accordance with law'.
It is appealed to all GST officials all over India to desist from passing orders without affording an opportunity of personal hearing as in table I and without violating time lines as in table 2 above. This shall reduce the litigation and also save the officials from being remanding the same OIO to pass a fresh order again which increases his workload. Setting aside or quashing an order at a later date by the competent court is not a good sign on the OIO or OIA as the case may be.