Gauhati High Court Clarifies Opportunity of Hearing Mandatory Under Section 75(4) AGST Act Even If No Reply Filed

Background and Context
The petitioner, registered under the Central Goods and Services Tax Act, 2017, was issued a show cause notice dated 25.07.2025 for the financial year 2024–25 under Section 73(1) of the Assam Goods and Services Tax Act, 2017 (“the State Act”). The notice alleged suppressed turnover and called upon the petitioner to show cause why tax, interest, and penalty should not be levied. The petitioner did not file a reply, and an adverse order was subsequently passed under Section 74A(5) of the State Act.

Legal Issues and Submissions
The petitioner contended that the notice was wrongly issued under Section 73, as the relevant period fell under Section 74A after the 2025 amendment to the State Act. It was further argued that, regardless of whether a reply was filed, the authorities were statutorily required to provide an opportunity of hearing under Section 75(4) of the State Act. The petitioner relied on the Gauhati High Court’s earlier decision in Construction Catalysers Private Limited v. State of Assam, which held that an adverse order cannot be passed without affording such an opportunity.

The respondents argued that the petitioner, having knowledge of the notice and failing to reply, could not challenge the order in writ proceedings and had an alternative remedy under Section 107 of the State Act.

Court’s Reasoning
The Court observed that the mere wrong citation of a statutory provision does not vitiate proceedings if the substance of the notice and the authority’s jurisdiction are otherwise proper. In this case, although the notice cited Section 73, its contents and the relevant period clearly brought it within the ambit of Section 74A. The Court clarified that the notice should be deemed to have been issued under Section 74A.

However, the Court found that the show cause notice only required submission of a reply and did not mention any opportunity of hearing. Citing its previous decision in Construction Catalysers Private Limited, the Court reiterated that Section 75(4) of the State Act mandates an opportunity of hearing even if no reply is filed. The failure to fix a date for hearing deprived the petitioner of a valuable statutory safeguard.

Decision and Directions
The Gauhati High Court set aside the impugned order dated 15.09.2025 for non-compliance with Section 75(4). The Court directed that:

1. The notice dated 25.07.2025 shall be treated as issued under Section 74A of the State Act.
2. The petitioner is granted liberty to submit a reply within seven days from the date of the order, along with any supporting documents.
3. The respondent authorities must fix a date for hearing, either on the date of reply submission or by the last date for reply, and proceed to dispose of the proceedings in accordance with law.

This judgment reinforces the mandatory nature of the opportunity of hearing under Section 75(4) of the Assam GST Act, ensuring procedural fairness even where the taxpayer has not responded to a show cause notice.