Mandatory pre-adverse hearing under GST requires consideration of the taxpayer's reply before final order, or the assessment fails.

Under Section 75(4) of the Tamil Nadu GST Act, an adverse tax order cannot be sustained unless the authority first considers the assessee's reply and then affords a meaningful opportunity of hearing before finalising the decision. A hearing notice issued before receipt and application of mind to the explanation does not satisfy the statutory requirement where an adverse order is contemplated. The Madras High Court held that this amounted to breach of the mandatory hearing provision, quashed the impugned orders, and remitted the matters for fresh orders after issuing personal hearing notices.

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Issues: Whether the impugned orders were liable to be quashed for non-compliance with the requirement of granting an opportunity of hearing after consideration of the reply and before passing an adverse order under Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017.

Analysis: Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017 mandates a hearing where a written request is made or where an adverse decision is contemplated. The replies had been submitted before the impugned orders were passed, and the statutory duty was to apply mind to those replies before deciding whether an adverse order was contemplated. A hearing notice issued before receipt and consideration of the explanation would not satisfy the statutory requirement. The absence of a meaningful post-reply opportunity of hearing amounted to a clear breach of the provision.

Conclusion: The impugned orders were quashed and the writ petitions were allowed, with the matters remitted for fresh orders after issuing personal hearing notices.

Final Conclusion: The decision holds that an adverse tax order cannot be sustained unless the authority first considers the assessee's explanation and then affords a proper opportunity of hearing before finalising the decision.

Ratio Decidendi: Where the statute requires a hearing before an adverse decision is taken, a hearing notice issued without prior consideration of the taxpayer's reply does not amount to compliance with the mandatory requirement of hearing.

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