Introduction

This judgment is a significant pronouncement on adherence to the principles of natural justice in GST adjudication. The Orissa High Court held that an adjudication order passed under Section 73 and a subsequent rectification order under Section 161 could not be sustained where the adjudicating authority erroneously recorded that no reply had been filed and no personal hearing had been sought, despite the taxpayer having filed a detailed reply in Form GST DRC-06 specifically requesting a personal hearing.

The Court emphasized that consideration of the taxpayer’s reply and grant of an opportunity of personal hearing are indispensable components of a fair adjudication process. Since the adjudicating authority ignored the reply, failed to provide a hearing, and subsequently attempted to rectify the error without granting an opportunity of hearing, both orders were held to be arbitrary and violative of the principles of natural justice.