JEST GST - 443

JULY 15, 2026

The Unheard Order

By Vijay Kumar

A taxpayer landed before the Bombay High Court with a writ petition. Six copies – each running into nearly six hundred pages. Because an Assistant Commissioner decided that passing an order did not require the tedious chore of actually listening to the taxpayer. (WRIT PETITION NO.11610 OF 2026) - 2026-TIOL-820-HC-MUM-GST

And the taxpayer wasn't a small trader or a confused start-up. It was Standard Chartered Bank. You would assume that when the assessee is a massive multinational bank, the department would at least deposit a basic modicum of respect for natural justice. But no - apparently, hearing the other side was treated like a festival -celebrated occasionally, skipped conveniently.

Right at the beginning, counsel for both sides quietly agreed that the impugned order had indeed been passed without giving the petitioner a personal hearing. That moment in litigation is always amusing when everyone quietly agrees that the basic procedure was ignored, after which everyone spends a small fortune proving that the obvious was, in fact, obvious.

The petitioner's counsel submitted that on this ground alone the order stood vitiated - and rightly so. If you do not hear the taxpayer when the law says you must, the order is not merely weak; it is practically waving a banner saying, "Please challenge me in High Court".

On the first date of hearing in the High Court, the Revenue's counsel sought an adjournment to obtain instructions from the officer concerned and check whether there was any scope for hearing the petitioner and passing a fresh order. Essentially, they needed time to check whether the officer could be persuaded to obey the very statute he was hired to enforce. A thrilling development for anyone whose hobby is administrative improvisation.

Then, on 01 July 2026, the Revenue's counsel, on instructions, magnanimously agreed with the petitioner's stand and submitted that the Assistant Commissioner would hear the petitioner and pass a fresh order in accordance with law. A concession that arrived late enough to need its own apology. The law had already spoken; the department simply showed up fashionably late to agree with it.

The Court's Order

The Court did exactly what courts do when statutory procedure is treated like a friendly suggestion: it set aside the order and remanded the matter for a de novo hearing. Judicial shorthand for: "Well done, everyone. Please go back and do it properly this time."

The cleanup was tidy:

- The impugned order dated 16 February 2026 was set aside.

- The proceedings were remanded for fresh hearing.

- The authority was directed to hear the parties afresh and pass a reasoned order on merits and in accordance with law, as expeditiously as possible, with cooperation from the petitioner.

All very neat - and all entirely avoidable.

But why skip the hearing?

This is the real mystery. What deep administrative wisdom led the adjudicating authority to think skipping a hearing was a masterstroke? What was the ROI here?

- Did he hope to save time? He did not save time. He manufactured a massive delay.

- Did he hope to save effort? He did not save effort. He multiplied it.

- Did he hope to save himself from being persuaded? That is not how law works. If your order cannot survive a simple conversation with the taxpayer, the problem isn't the conversation-the problem is your order.

What did the officer achieve by denying the hearing?

- A fat writ paper book of about 600 pages - six copies.

- Three hearings before a bench of two judges of the High Court.

- The order being set aside and remanded to him - Getting the file dropped right back onto his desk.

This is the ultimate form of administrative yoga: you bend over backwards, strain every muscle and still end up precisely where you started.

He could have avoided all this simply by granting a date for hearing. It is not that the order would necessarily have changed - but at least the principles of natural justice would have appeared to have been followed. Instead, he chose the more expensive route: ignore the hearing, provoke litigation, and let the High Court explain the basics.

The officer's efficiency was impressive - if the goal was to create litigation.

The Law is Painfully Clear

Section 75(4) of the GST Act states:

"An opportunity of hearing shall 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."

This is not a polite suggestion. This is a command.

The word "shall" does not mean "if convenient," "if the officer is in a good mood," or "if the stars align and the file is not too heavy." It means hearing is mandatory.

So, hearing must be granted if:

- a written request is made; or

- an adverse decision is contemplated.

Which is to say: in the ordinary course of adjudication. If an officer is contemplating an adverse order and still thinks a hearing is optional, that is not discretion. That is misreading the law with remarkable confidence - confidence in the wrong direction.

The Sequel Nobody Asked For

Yet taxpayers keep approaching High Courts with the same grievance: no hearing, adverse order, and a procedural mess that could have been avoided with one short notice and one proper sitting. The facts change, the assessee changes, the officer changes - but the plot remains stubbornly identical. It is the tax administration equivalent of a sequel nobody asked for.

A personal hearing does not require the officer to change his mind. It merely requires him to hear the taxpayer before deciding. Nobody is asking for a hug, a promise, or a miracle. Just a lawful hearing.

Some officers seem to behave as though a hearing weakens authority. It does not. It strengthens the order. A fair hearing gives the decision legitimacy. A skipped hearing gives the taxpayer a writ petition and the Court a headache. If the authority is worried that listening might take too long, litigation will gladly teach him the meaning of "too long."

The Lesson

The lesson is brutally simple:

When the statute says ‘hear', you must hear.

Not later. Not after the order. Not after the writ. Not after the remand. Before the order.

Due process is not a luxury package. It is the floor, not the ceiling.

So yes, the order was set aside. Yes, the matter was remanded. Yes, the file was huge enough to require its own luggage tag. But the real embarrassment is that the whole episode could have been avoided by doing the obvious thing at the obvious time.

A hearing would not have guaranteed success for the taxpayer. It would only have guaranteed fairness for the process - which, in law, is a rather important detail.

The department did not lose the case because it heard the taxpayer; it lost because it refused to.

A hearing is not a courtesy; it is part of the procedure, which is why skipping it never ends well.

The law did not ask the officer to agree with the taxpayer, only to hear him first.

The officer saved an hour of hearing and created days of litigation. Excellent return on investment - for the lawyers.