The Gujarat High Court has set aside a GST adjudication order after finding that the assessee’s detailed reply was not considered due to a technical lapse, holding that the order violated the principles of natural justice.
The bench of Justice Bhargav D. Karia and Justice Pranav Trivedi has observed that considering the above submissions and the actions taken by the Principal Commissioner, GST so as to not to repeat such error while passing adjudicating orders by ignoring the reply filed by the Assessee because of any ground, no further action is required in the matter.
The assessee was issued a show-cause notice in August 2024 demanding reversal of Input IGST Credit worth ₹1.46 crore, alleging violations under Section 16(2) of the CGST Act. Within two days, the assessee filed a detailed reply on the GST portal with invoices, e-way bills, lorry receipts, and ledgers.
Despite this, the adjudicating authority passed an ex-parte order declaring that no reply had been filed.
The department initially defended its action, stating that multiple hearing opportunities were given but the assessee did not respond. However, the Principal Commissioner later admitted that the reply had indeed been filed on the GST portal but was not visible to the adjudicating authority due to a system-related glitch.
To prevent such lapses, the department issued Instruction No. 02/2025, prescribing strict procedures for handling replies and personal hearings, including daily checks of email (including junk folders), diarization of replies, and verifying submissions across all GSTN menus.
The court held that passing an order without considering the reply constituted a breach of natural justice. While the Court refrained from examining the merits of the tax demand, it ruled that the adjudication order could not stand.
The High Court has quashed the order and directed the adjudicating authority to reconsider the reply filed in August 2024. Ordered a fresh decision within 12 weeks, after granting the assessee an opportunity of hearing.
Case Details
Case Title: Multi Metal Industries Versus The Union Of India & Anr.
Case No.: R/Special Civil Application No. 3182 Of 2025
Date: 31/07/2025
Counsel For Petitioner: Sahil J Rao
Counsel For Respondent: Hetal G Patel
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Mariya is the Senior Editor at Juris Hour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
