M/S Sayyad Akhtar Ali vs. The State Of Madhya Pradesh

Held

The Court held that Section 75(4) of the CGST Act mandates an opportunity of hearing to 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 Court found that the provision clearly indicates that when an adverse decision is contemplated, an assessee must be given an opportunity of hearing even without a specific request. This view was fortified by the judgment of a Co-ordinate Bench in Technosys Security System (P.) Ltd. (Supra). Since the impugned order clearly shows that no opportunity of hearing was afforded to the petitioner, the Court quashed the impugned order. The respondents were granted liberty to pass a fresh order in accordance with law after affording an opportunity of hearing to the petitioner, if advised so. The petition was allowed and disposed of.

Facts

The petitioner, M/s Sayyad Akhtar Ali, challenged an order dated 02.07.2025 passed by the Joint Commissioner of State Tax, Ratlam Division, Indore. This order was issued under Section 73 of the Central Goods and Services Tax Act, 2017, for the financial year 2021-2022. The petitioner contended that the impugned demand order was passed in violation of Section 75(4) of the CGST Act because no opportunity for a personal hearing was provided. The State argued that a personal hearing is only mandatory if requested by the assessee. The High Court considered the arguments and the relevant statutory provision.

Key Issues

1. Whether the impugned order passed under Section 73 of the CGST Act is liable to be quashed for violation of Section 75(4) of the CGST Act, specifically concerning the opportunity of personal hearing, and what is the interpretation of Section 75(4) of the CGST Act? Petitioner's Contention: The petitioner argued that the impugned order was passed in violation of Section 75(4) of the CGST Act as no personal hearing was granted. They relied on the judgment in Technosys Security System (P.) Ltd. Vs. Commissioner, Commercial Taxes [2023] 157 Taxmann.com 145 (M.P.), asserting that an opportunity of personal hearing must be afforded even without a specific request when an adverse decision is contemplated. Revenue's Contention: The respondent/State contended that as per Section 75(4) of the CGST Act, an opportunity for personal hearing is only mandated if a request is made in writing by the assessee.