GST Adjudication Set Aside: Lack of Proof of Hearing Notice - Maya Store Ruling

1. The Hook (Introduction)

For a business, receiving an adverse GST order without a chance to explain your side is a major procedural failure. But can the GST department claim they "uploaded" a notice to a now-defunct online portal without any proof? The Calcutta High Court has stepped in to clarify that "lack of proof" is "lack of service."

"6. In such view of the matter, there is nothing before this court to come to the definite conclusion that any notice was indeed served upon the petitioners thereby affording them an opportunity of hearing."

"7. In terms of the provisions of Section 75(4) of the said Act of 2017, if an order having adverse consequence is contemplated, grant of an opportunity of hearing is mandatory."

"8. Since it has not been proved before this Court, to any decree of satisfaction, that the petitioners have been afforded an opportunity of hearing prior to the impugned decision being taken, therefore the said decision falls foul of the principles of natural justice as well as the provisions of Section 75(4) of the said Act of 2017 which grant statutory recognition to such principles."

2. The General Proposition

The "Principle of Natural Justice" is a cornerstone of any administrative or legal proceeding, particularly in tax law where the stakes are high. One of its key pillars is Audi Alteram Partem—the right to be heard.

This is not just a moral requirement; it is a statutory right. If the government intends to pass an order that will negatively affect a taxpayer (such as a demand for tax or penalty), it is legally bound to provide a fair opportunity for that taxpayer to represent their case.

3. The Facts & The Law

The Facts: A Vanished Portal

The case involves Maya Store, which challenged a GST adjudication order passed under Section 73 for the period July 2017 to March 2018. The petitioner argued that the order was passed without any opportunity for a personal hearing.

In response, the GST Authorities filed an affidavit admitting that they hadn't sent a physical letter. They claimed that the hearing date was provided "online" via the ACES-GST Application on the CITRIX APPSTORE.

However, they admitted that the application was withdrawn in June 2025, and they had no record, no proof, and no screenshot to show that the notice was actually ever issued to the petitioner.

The Law: The Mandatory Hearing Rule

• Section 75(4) of the CGST / WBGST Act, 2017: This section states that a personal hearing must be granted where a request is received in writing or where any adverse decision is contemplated.
• Section 73: The provision used by the Proper Officer to pass the original order for demand of tax.

4. Arguments & Precedents

Petitioner's Contention: The petitioner contended that the order violated the statutory mandate of Section 75(4) because no hearing was actually provided, making the entire adjudication process illegal.

Revenue's Contention: The Revenue argued that they had fulfilled the requirement by putting the notice online, but they were simply unable to prove it now because the internal application they used had been withdrawn by the department.

5. The Ratio & Analysis

The Ratio: Proof of Service is Mandatory

The Calcutta High Court held that when an order with adverse consequences is planned, providing a personal hearing is mandatory under Section 75(4). If the department cannot provide any evidence (digital or physical) that the notice was served, the court cannot assume the taxpayer was given a fair chance.

"In terms of the provisions of Section 75(4)... if an order having adverse consequence is contemplated, grant of an opportunity of hearing is mandatory."

Analysis: Administrative Failures

The Court emphasized that the burden of proving service of notice lies squarely on the department. The withdrawal of an internal software application (ACES-GST) is an administrative decision by the government and cannot be used as an excuse to deny a taxpayer their fundamental right to a hearing.

The Court quashed the adjudication order and remitted the matter back for a fresh hearing, ensuring that the taxpayer is finally given their "day in court."

6. Case Identification (Footer Only)

• Case No: WPA 19924 of 2025
• Order Date: February 23, 2026
• Court: High Court of Calcutta
• Original Citation: 2026-VIL-223-CAL

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Disclaimer: This article is for educational purposes and provides an update on legal developments. It is not to be construed as legal advice.