Gujarat High Court Sets Aside GST Demand Order in K D Engineers Case for Ignoring Personal Hearing Requests and Supplementary Reply
Overview of the Case
The Gujarat High Court, in the matter of K D Engineers Vs Deputy/Assistant Commissioner, was called upon to adjudicate a writ petition directed against a tax order issued under the Central Goods and Services Tax Act, 2017. The core grievance raised by the petitioner revolved around a fundamental procedural lapse — the adjudicating authority had passed an adverse order without complying with the mandatory hearing requirement prescribed under Section 75(4) of the CGST Act, and had further failed to consider a supplementary reply filed before the order was passed.
The High Court, after examining the factual matrix and the legal framework, found merit in the petitioner's challenge and intervened to quash both the impugned order and the consequential demand notice.
Background and Factual Matrix
Timeline of Events
The sequence of events leading to this dispute can be understood as follows:
- 11.07.2025 — The adjudicating authority conducted a personal hearing in which the petitioner (K D Engineers) participated and made its submissions.
- 21.07.2025 — The petitioner sent an email to the respondent authority explicitly requesting an additional personal hearing before any adverse order was passed, anticipating further developments in the matter.
- 14.08.2025 — The petitioner filed an additional reply on the GST portal, incorporating new grounds not covered in the earlier hearing. This reply simultaneously renewed the request for a personal hearing.
- 20.08.2025 — Despite the pending requests, the adjudicating authority passed the order-in-original, relying solely on the hearing conducted on 11.07.2025.
- 04.09.2025 — A demand notice in Form DRC-07 was issued as a consequence of the above order.
The petitioner challenged both the order dated 20.08.2025 and the demand notice dated 04.09.2025 through a writ petition before the Gujarat High Court.
Petitioner's Arguments
The petitioner, represented by advocate Ms. Shradha Agrawal (assisted by advocate Mr. Manya N. Anjaria), advanced the following key contentions:
Violation of
Section 75(4)of the CGST Act: The provision mandates that an opportunity of personal hearing must be granted when an adverse order is contemplated. The adjudicating authority disregarded this statutory obligation by not responding to the hearing requests made on 21.07.2025 and 14.08.2025.Supplementary Reply Ignored: After the personal hearing on 11.07.2025, the petitioner filed an additional reply on 14.08.2025 raising further grounds. This document was not taken into account at all while passing the impugned order.
Non-Consideration Acknowledged in the Record: Notably, the additional reply itself explicitly recorded that it had not been considered by the competent authority — a fact which, according to the petitioner, made the procedural infirmity self-evident on the face of the record.
The petitioner urged that on these short but decisive grounds alone, the order warranted quashing without entering into the merits of the underlying tax dispute.
Respondent's Defence
The respondent, represented by Senior Standing Counsel Mr. Archit P. Jani, sought to justify the adjudicating authority's conduct by advancing the following arguments (placing reliance on the affidavit-in-reply dated 10.02.2026, particularly paragraph No. 22):