Hearing Notices Not on Taxpayer's GSTIN Portal Breach Section 75(4): Rajasthan HC in PVR Inox v. Union of India

In M/s PVR Inox Limited v. Union of India & Ors. (2024:RJ-JP:30253-DB), the Rajasthan High Court held that "the statutory mandate was not complied with" where hearing notices never reached the taxpayer's GSTIN portal (paras 8–9). A Division Bench of Manindra Mohan Shrivastava, CJ and Ashutosh Kumar, J allowed five connected writ petitions and set aside the impugned orders (paras 10, 12). The authority must hear the petitioner and decide afresh within two months, with all grounds left open (para 11).

Headnote: Section 75(4) Personal Hearing GST

RGST Act, 2017 / CGST Act, 2017 – Sections 7, 9, 15, 50, 73, 75(2), 75(4) – Personal hearing on written request – Hearing notices uploaded on departmental portal but not reflected on GSTIN portal – Technical glitch – Violation of statutory mandate – Remand

Held: (i) Section 75(4) requires an opportunity of hearing where a request is received in writing from the person chargeable with tax or penalty, or where an adverse decision is contemplated (para 7). (ii) Where the taxpayer requested a personal hearing in writing, it was entitled to be heard before any order was passed (paras 8–9). (iii) Hearing notices uploaded on the departmental portal but not reflected on the taxpayer's GSTIN portal do not satisfy Section 75(4), even if the failure is due to a technical glitch (paras 5, 9). (iv) Violation of the right of personal hearing alone warrants setting aside the orders, without examining the merits (para 10). (v) The matters were remanded for personal hearing and fresh orders within two months, with all grounds left open (para 11).

(paras 7–11)

Case Details: PVR Inox (2024:RJ-JP:30253-DB)

Final Outcome: Writ petitions allowed; impugned orders set aside; matters remanded for personal hearing and fresh orders within two months (paras 10–12)

Case: M/s PVR Inox Limited (formerly M/s Inox Leisure Limited) v. Union of India & Ors.

Neutral Citation: 2024:RJ-JP:30253-DB

Case No.: D.B. Civil Writ Petition No. 19799/2023, with D.B. Civil Writ Petition Nos. 19801/2023, 19802/2023, 19804/2023 and 19814/2023

Court: Rajasthan High Court, Bench at Jaipur (Division Bench)

Date of Decision: 19 July 2024

Bench: Manindra Mohan Shrivastava, CJ and Ashutosh Kumar, J (common order of the Division Bench; authoring judge not indicated on the order)

Relevant Acts & Sections: Sections 7, 9, 15, 50, 73, 74(1), 75(2) and 75(4), Rajasthan Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017

Impugned Order: Orders passed under Sections 7, 9, 15, 50 and 73 of the RGST/CGST Acts in respect of different assessment years by the State Tax authorities, Circle B, Enforcement Wing Rajasthan-II, Jaipur (paras 3, 9)

Counsel: Mr. Gopal Mundhra, Advocate (through video conferencing), and Mr. Daksh Pareek, Advocate, for the petitioner; Mr. Sandeep Taneja, Additional Advocate General; Mr. Sandeep Pathak, Advocate, with Mr. Akshat Sharma, Advocate; and Mr. Punit Singhvi, Advocate, with Mr. Ayush Singh, Mr. Ajay S. Rathore and Ms. Shraddha Mehta, Advocates, for the respondents

Source: Rajasthan High Court (official website)

Key Holdings of the Rajasthan High Court

• Section 75(4) mandates a hearing where the person chargeable with tax or penalty requests it in writing (paras 7–8).
• The right also arises where an adverse decision is contemplated against such person (para 7).
• Once the taxpayer files a written request for personal hearing, the authority must actually afford that hearing (paras 8–9).
• Uploading hearing notices on the departmental portal does not discharge the mandate if they never reflect on the taxpayer's GSTIN portal (para 9).
• A technical glitch, even if not deliberate, does not save orders passed without the hearing required by law (paras 5, 9–10).
• Breach of the Section 75(4) right is by itself sufficient to set aside the orders, without entering the merits (paras 10–11).
• On remand, the authority must decide within the time fixed, and the taxpayer may not seek adjournments (para 11).

Brief Facts of the Case

The petitioner, M/s PVR Inox Limited, was formerly known as M/s Inox Leisure Limited. It is a company with its registered office at Vaishali Nagar, Jaipur. Its five writ petitions raised an identical issue of law and were heard together (para 2).

The petitions challenged proceedings drawn and orders passed under Sections 7, 9, 15, 50 and 73 of the RGST Act and the CGST Act (para 3).

Show cause notices were issued to the petitioner. It filed replies contesting the matters on merits, without admitting the proposed demand (para 4). In each reply, it also submitted a written request for an opportunity of personal hearing (paras 4, 9).

The respondents uploaded notices of personal hearing on the common portal of the Department. However, these notices were not reflected on the petitioner's GSTIN portal (paras 4–5, 9).

Orders were then passed against the petitioner for different assessment years, without a personal hearing. The petitioner placed material on record through additional affidavits, including a response to a query on the portal issue (paras 4, 9).

Issues Before the High Court

The Court did not frame issues formally. From the common submission and the reply, the question was:

1. Whether orders passed without a personal hearing, after the taxpayer sought one in writing, were sustainable under Section 75(4) when the hearing notices did not reflect on the taxpayer's GSTIN portal due to a technical glitch (paras 4–5, 9).

Court's Findings and Reasoning

Petitioner's case (para 4): The petitioner argued that, irrespective of merits, the orders violated natural justice and the mandatory terms of Section 75(4). The provision, it said, goes beyond a show cause notice and requires a personal hearing once the assessee demands it (para 4).

It pointed to its pleadings and additional affidavits. Although the notices were uploaded on the departmental portal, they never reflected on its GSTIN portal, resulting in violation of the statute (para 4).

Revenue's case (para 5): Counsel for the respondents "would fairly submit" that hearing notices were uploaded consistent with Section 75(4). They accepted that, because of technical glitches, the notices could not be reflected on the petitioner's GSTIN portal (para 5).

They urged that this was "merely a technical glitch". It could not be called a deliberate act to deny the petitioner a personal hearing (para 5).

Scheme of Section 75 (para 7): Section 75 contains general provisions on determination of tax. Under Section 75(2), a failed Section 74(1) notice is treated as a Section 73(1) notice for determining tax (para 7).

Section 75(4) provides that an opportunity of hearing shall be granted where a written request is received from the person chargeable with tax or penalty. It is also due where any adverse decision is contemplated (para 7).

Nature of the mandate (para 8): The Court described Section 75(4) as a "mandate of law". Where the person chargeable seeks a hearing, "he/she shall be granted such an opportunity", provided the request is in writing (para 8). The written request is the trigger, and the authority then has no discretion to decide without hearing (para 8).

Undisputed facts (para 9): It was undisputed that the petitioner, after receiving notices, applied in each case for a personal hearing (para 9). It was also undisputed, from the additional affidavit and its annexed response, that the hearing notices never reflected on the petitioner's GSTIN portal (para 9).

Statutory mandate not complied with (para 9): On these facts, the Court held that "the statutory mandate was not complied with". The impugned orders had been passed for different assessment years without the hearing the law required (para 9).

The Court did not accept the "technical glitch" explanation as a defence. The respondents' bona fides did not cure the fact that the petitioner was never effectively notified of the hearing (paras 5, 9).

Orders set aside on this ground alone (para 10): The petitioner's right to a personal hearing "in the manner as provided under the law" was violated. The Court set aside the orders "on this ground alone" (para 10).

Application to facts (para 11): The Court clarified that it had not decided the matters on merits, and all grounds remain open to the petitioner (para 11). It fixed a two-month timeline and barred the petitioner from seeking any adjournment on the hearing date (para 11).

Final Outcome and Directions

• The impugned orders in all five writ petitions were set aside (paras 10–11).
• The matters were remanded to the competent authority to afford a personal hearing and pass appropriate orders in accordance with law (para 11).
• The respondents must complete the proceedings in all cases within two months from 19.07.2024 (para 11).
• The petitioner shall not seek any adjournment on the date fixed for personal hearing (para 11).
• The merits were not decided, and all grounds are open to the petitioner (para 11).
• The writ petitions were allowed, and a copy of the order was directed to be placed on each file (paras 12–13).
• The order is silent on costs, interest, and the status of any recovery or pre-deposit.

Legal Principle Laid Down

Under Section 75(4) of the CGST Act and the corresponding State GST Act, a hearing is mandatory where the person chargeable requests it in writing, or where an adverse decision is contemplated. Once a written request is on record, the taxpayer must be effectively notified of the hearing date. A notice uploaded on the departmental portal that never reflects on the taxpayer's GSTIN portal does not suffice, even if due to a bona fide glitch, and an order passed without hearing is liable to be set aside and remanded (paras 7–11).

Precedents Relied Upon

• No precedent is cited or discussed in the order. The Court decided the matters on the text of Section 75(4) of the RGST/CGST Acts and the undisputed facts on record (paras 7–10).

Important Paragraphs of the Judgment

Verbatim extracts from the judgment. For the full text, refer to the judgment PDF below.

Para 5 (Revenue's plea): "Learned counsels for the respondents would submit that this is merely a technical glitch and cannot be said to be a deliberate action on the part of the respondents in denying opportunity of personal hearing to the petitioner."

Para 8 (mandate of law): "The aforesaid mandate of law requires that in a case where the person chargeable with tax or penalty seeks an opportunity of hearing, he/she shall be granted such an opportunity provided that such a request is received in writing."

Para 9 (non-compliance): "It is, therefore, apparent that the statutory mandate was not complied with and impugned orders were passed against the petitioner in respect of different assessment years."

Para 10 (orders set aside): "As petitioner's right of opportunity of personal hearing in the manner as provided under the law has been violated, we are inclined to set aside the impugned orders on this ground alone."

Para 11 (directions): "The respondents are directed to complete the proceedings in all the cases within a period of two months from today. The petitioner shall not seek any adjournment on the date fixed for its personal hearing. However, it is made clear that this Court has not decided these matters on merits and it will be open for the petitioner to raise all the grounds which are available to it under the law."

Practical Impact of the Ruling

• For taxpayers: Always request a personal hearing in writing in the reply to a show cause notice. That written request triggers the Section 75(4) mandate (paras 4, 8–9).
• For taxpayers facing portal issues: Where a hearing notice never appears on the GSTIN portal, document it through affidavits and portal responses, as the petitioner did (para 9).
• For the department: Uploading a notice on the departmental side is not enough if it does not reach the taxpayer's dashboard (paras 5, 9).
• For adjudicating officers: A bona fide technical glitch will not save an order passed without the hearing the law requires (paras 5, 9–10).
• For litigants: Breach of Section 75(4) is an independent ground for quashing, but expect a time-bound remand and limits on adjournment (paras 10–11).

FAQs on Section 75(4) Personal Hearing GST

1. What did the Rajasthan High Court hold in PVR Inox Ltd v. Union of India?

The Court held that GST orders passed without the personal hearing the petitioner had sought in writing violated Section 75(4). It set aside the orders and remanded the matters for a hearing and fresh orders within two months (paras 9–11).

2. Is a Section 75(4) personal hearing in GST mandatory?

Yes, where the person chargeable with tax or penalty requests it in writing, or where an adverse decision is contemplated. The Court called this a "mandate of law" (paras 7–8).

3. Can a GST order stand if the hearing notice was not visible on the taxpayer's portal?

No. Notices uploaded on the departmental portal but not reflected on the petitioner's GSTIN portal did not satisfy Section 75(4), even though the cause was a technical glitch (paras 5, 9).

4. Did the Court decide the GST demand on merits in PVR Inox?

No. The orders were set aside on the hearing ground alone, and the petitioner may raise all available grounds before the authority on remand (paras 10–11).

5. What directions did the Rajasthan High Court give on remand?

The authority must grant a personal hearing and complete the proceedings within two months. The petitioner cannot seek any adjournment on the date fixed for hearing (para 11).

Keywords: 2024:RJ-JP:30253-DB, PVR Inox Ltd v. Union of India, Section 75(4) personal hearing GST, Section 75(4) CGST Act, Section 75(4) RGST Act, personal hearing, Section 73 demand, GST portal technical glitch, GSTIN portal, natural justice, remand, tax litigation lawyer, Rajasthan High Court, Manindra Mohan Shrivastava CJ

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Download Judgment PDF – PVR Inox Limited v. Union of India

Judgment PDF: 2024:RJ-JP:30253-DB – M/s PVR Inox Limited v. Union of India & Ors. (D.B. Civil Writ Petition No. 19799/2023 and connected matters) – Download Judgment PDF

Source: Rajasthan High Court (official website).

Read more: Rajasthan High Court · GST · GST Adjudication · Indirect Tax