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

For a business, receiving an adverse GST order without a chance to explain your side is a major procedural failure. The Calcutta High Court has clarified that "lack of proof" is "lack of service."

"8. Since it has not been proved before this Court... 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."

The "Principle of Natural Justice" is a cornerstone of any administrative or legal proceeding. 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, it is legally bound to provide a fair opportunity for that taxpayer to represent their case.

Key Takeaways

• Service of hearing notice must be provable; lack of proof invalidates the order.
• Section 75(4) mandates personal hearing before adverse decisions.
• Internal system lapses do not excuse denial of hearing rights.

Who This Applies To

GST taxpayers challenging adjudication orders passed without a properly served hearing notice.

The Facts

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 However, they admitted that the application was withdrawn in June 2025, and they had no record, no proof, and no screenshot to show that the notice was actually ever issued to the petitioner.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

• 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.

Arguments

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. The Revenue argued that they had fulfilled the requirement by putting the notice online, but were unable to prove it due to the withdrawal of the internal application.

• Petitioner Contentions: The petitioner contended that the Order-in-Original passed under Section 73 violated the mandatory requirements of Section 75(4) of the CGST Act, as no opportunity for a personal hearing was ever communicated or granted, vitiating the entire adjudication on grounds of natural justice.
• Revenue Contentions: The Department submitted that an online hearing schedule had been generated within their internal ACES-GST application. However, because ACES-GST was decommissioned in June 2025, the Revenue was unable to produce any audit log, dispatch receipt, or electronic delivery proof evidencing actual transmission of the hearing notice to the assessee.

Practical Impact

Adverse GST assessment and demand orders passed without tangible proof of service of hearing notices violate Section 75(4) and can be set aside through High Court writ jurisdiction under Article 226.

The Decision

Verdict: Writ Petition Allowed; Matter Remanded.

The Calcutta High Court held that the burden of proving effective service of a hearing notice lies squarely upon the tax authorities. Administrative transitions or internal discontinuation of software systems (such as the ACES-GST application) do not relieve the Department of its statutory obligation under Section 75(4) to afford an opportunity of hearing. The Court set aside the impugned adjudication order and remitted the proceedings to the Proper Officer to pass a fresh order after serving formal notice and granting a personal hearing.

Case Details

• Court / Forum: High Court at Calcutta (Constitutional Writ Jurisdiction)
• Case Name: Maya Store & Anr. vs. Union of India & Ors.
• Case Number: WPA 19924 of 2025
• Date of Judgment: 23rd February 2026
• Statutory Provisions: Section 73, Section 75(4), Section 169 of the CGST / WBGST Act, 2017.