2025 (7) TMI 770 - HC - GST

HC sets aside order for denying mandatory third hearing under DRC-01 notice proceedings violating natural justice

TVL. BHARATH TRANSPORTS Versus STATE TAX OFFICER-2 (INSPECTION) (ST) (INT.), TIRUCHIRAPPALI

HC set aside order passed without granting mandatory third hearing to petitioner under DRC-01 notice proceedings. Despite petitioner's timely reply ... Violation of principles of natural justice - order has been passed without giving the mandatory third hearing to the petitioner - HELD THAT:- Even as per the impugned order, for the hearing notice dated 4-7-2024, fixing the hearing on 12-7-2024, a reply had been manually submitted by the petitioner on 10-7-2024. He had sought for further time to present his case in person and also for production of records. But however, without granting the third hearing, the first respondent had proceeded to pass the order impugned herein. The provision mandates a maximum of three personal hearings to the assessee pursuant to the DRC-01 notice. When the petitioner has sought for the third hearing, it is incumbent upon the respondent to give the final opportunity. In the present case, that has not been done. Hence, the impugned order is set aside and the matter is remitted back to the first respondent with a direction to the first respondent to grant an opportunity of personal hearing to the petitioner. The petitioner undertakes to appear before the first respondent on 24-12-2024, on which date, the first respondent shall hear the petitioner and pass appropriate orders on merits and in accordance with law subject to the documents produced by the petitioner. Petition disposed off. The Madras High Court addressed the petitioner's challenge to an order passed pursuant to a Form GST DRC-01 notice dated 21-5-2024. The petitioner contended that despite filing replies and seeking a third personal hearing to produce documents, the order was passed without granting this mandatory third hearing. The respondent contended that three hearings are directory, not mandatory, and that the order was passed after personal hearings were granted but the petitioner failed to appear.The Court held that the relevant provision 'mandates a maximum of three personal hearings' following the DRC-01 notice. Since the petitioner requested the third hearing and it was not granted, the Court found this omission fatal. The impugned order was set aside, and the matter remitted with directions for the first respondent to grant the petitioner a final personal hearing. The petitioner is directed to appear on 24-12-2024, after which the respondent shall pass orders 'on merits and in accordance with law subject to the documents produced by the petitioner.'The writ petitions were disposed of with no order as to costs.