2026-VIL-144-GSTAT-RPR
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SGST Tribunal

GST - Denial of personal hearing - Section 75(4) of CGST/CGGST Act, 2017 - Adjudication order passed under Section 73 without post-reply personal hearing despite express request in FORM GST DRC-06 - Scrutiny of e-way bill data revealed two e-way bills generated against the same invoice for the same vehicle - The Appellant, in its reply, expressly opted for a personal hearing by selecting 'Yes', but the adjudicating authority confirmed the liability holding the explanation not satisfactory - Whether the original adjudication stands vitiated for failure to grant the personal hearing expressly requested under Section 75(4) - HELD - Section 75(4) requires an opportunity of hearing where a request is received in writing from the person chargeable with tax or where any adverse decision is contemplated against such person. In the present case both conditions converged as the Appellant expressly requested a personal hearing and an adverse decision was thereafter passed - Opportunity of hearing is contemplated by the statute has to be real and comprehensive and cannot be short-circuited. The statutory mandate cannot be rendered porous by a merely formal opportunity. As no post-reply personal hearing by the original adjudicating authority was demonstrated from the record, the requirement of Section 75(4) was not complied with - The original adjudication is vitiated for denial of the statutory personal hearing - The orders of the First Appellate Authority and the adjudicating authority to the extent of the surviving demand are set aside. The matter is remitted for fresh adjudication from the stage after receipt of the reply. Relief already granted on the other invoice remains undisturbed. The appeal is partly allowed by way of limited remand - Reasoned order - Section 75(6) of CGST Act, 2017 - Order confirming demand merely holding the reply 'not satisfactory' - The adjudicating authority, after referring to the duplicate e-way bill particulars and the Appellant's reply, recorded that the explanation was not satisfactory and confirmed the proposed liability. The Appellant pleaded that the order was vague and non-speaking - Whether the original adjudication order suffers from inadequate statement of reasons under Section 75(6) - HELD - Section 75(6) requires the proper officer to set out in the order the relevant facts and the basis of the decision. The requirement is substantive. A statement that the taxpayer's reply is 'not satisfactory', without engaging with the material explanation offered, does not disclose why the defence is unacceptable or how the statutory ingredients of the demand stand established - Recording of reasons demonstrates application of mind, facilitates effective appellate review and is an indispensable component of a fair decision-making process and a restraint against arbitrary exercise of quasi-judicial power - The original order did not meaningfully analyse the assertion of a single actual supply, the reason for duplicate generation, the statutory and evidentiary consequence of the two e-way bills, or the material necessary to infer an additional taxable transaction - The original adjudication suffers from an inadequate statement of reasons under Section 75(6) - Effect of subsequent appellate hearing - Remand under Section 113(1) of CGST Act, 2017 - Whether breach of Section 75(4) at the original stage stands cured by hearing before the First Appellate Authority and the Tribunal - HELD - A defect at the original stage cannot generally be treated as automatically cured merely because a higher forum has wider jurisdiction, and relegation to the original stage may be necessary depending on the nature of the breach and the facts. Under the GST enactment that denial of personal hearing under Section 75(4) is not cured merely because a hearing was granted at the appellate stage - Section 113(1) empowers the Appellate Tribunal to confirm, modify or annul the order or to refer the case back to the original adjudicating authority with directions for fresh adjudication - The remand is confined to the surviving demand and the existing show-cause notice. No demand can be confirmed outside the notice in view of Section 75(7). The Appellant is to place primary material and explanation on record. The adjudicating authority shall grant a specific personal hearing and pass a reasoned and speaking order, drawing permissible adverse inference if the Appellant fails to produce the material without sufficient cause - Non-cancellation of e-way bill - Rule 138(9) of CGST Rules - Duplicate e-way bills generated against the same invoice - Whether reference by the First Appellate Authority to Rule 138(9) amounts to introduction of a new charge and what is the relevance of non-cancellation of the second e-way bill - The Appellant's defence was that one e-way bill was unintended and did not represent a separate movement - HELD - Reference to Rule 138(9) does not, in the facts of this case, amount by itself to introduction of an altogether new charge. The Rule provides a mechanism for cancellation where an e-way bill has been generated but the goods are not transported or are not transported in accordance with the particulars furnished. It is therefore relevant to testing the Appellant's explanation. The expression 'may be cancelled' does not make non-cancellation an irrelevant circumstance - Once duplicate generation against the same invoice is established and the taxable person asserts that one e-way bill did not pertain to any intended or actual movement, the existence of the cancellation mechanism and the failure to use it are material circumstances to be weighed along with other evidence. The legal and evidentiary consequence must be determined from cumulative facts rather than from non-cancellation in isolation. The adjudicating authority shall consider it in its proper factual setting - No final view is expressed on whether the second e-way bill establishes an additional taxable movement or supply. The issue is left open for fresh adjudication.
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