The Gujarat High Court has quashed a GST recovery order after finding that the petitioners were not intimated of the date, time, and venue of personal hearing, a defect that deprived them of an effective opportunity of hearing.
The court held that the impugned order deserved to be quashed on three grounds:
“first, the failure of the respondent authorities to intimate the date, time, and venue of personal hearing; second, the passing of a non-speaking order; and third, the failure to afford the petitioner three opportunities of personal hearing as contemplated under Section 75(4) of the CGST Act.”
The order was passed by a division bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati on a petition filed by M/s Aarya Metals and others.
The case arose from a show-cause notice dated August 4, 2024, issued under Section 74(1) of the CGST Act for the recovery of Input Tax Credit of Rs.7,63,026 along with applicable interest.
The authorities alleged that the inward supplies received from M/s RK Battery and Scrap were non-genuine, as the supplier was found to be a non-genuine and non-existent taxpayer.
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The court noted that neither the show-cause notice nor the three subsequent reminders dated September 12, November 7 and November 18, 2024, specified the date, time or venue of the personal hearing.
Although the petitioners submitted their reply on November 21, 2024, the authorities passed a two-line order directing recovery of the amount along with interest and penalty.
Referring to its earlier decision in Aarti Enterprise vs State of Gujarat, (2026) 39 Centax 31 (Gujarat), the bench observed,
“We are of the considered opinion that in case the aforesaid details of personal hearing are not incorporated in the notice DRC 01, before final order is passed against the assessee, he is required to be intimated the date, time and venue of personal hearing.”
It further held that the authority was required to pass a reasoned order after considering all the materials.
The court also relied on its decision in Komal Jayeshbhai Hemavat vs State Tax Officer, (2026) 185 taxmann.com 500 (Gujarat), observing that even where an assessee selects “No” in the column relating to personal hearing, the mandate of Section 75(4) of the CGST Act has to be followed.
Accordingly, the bench allowed the writ petition, quashed and set aside the impugned order and remanded the matter to the jurisdictional State Tax Officer to pass a fresh order after affording the petitioners an opportunity of hearing in accordance with law within 12 weeks.
It clarified that the petitioners’ claim for refund along with interest would remain subject to the fresh order passed after considering their defence.
Case: M/s Aarya Metals and others vs The State of Gujarat & Anr
Case No: R/Special Civil Application No. 7535 of 2026
Date of Order: 28.07.2026
Status: Allowed
