Ensuring Natural Justice in GST Adjudications: Mandatory Consideration of Litigant’s Submissions and Personal Hearings

1. Introduction

In M/s Perfetti Van Melle India Pvt. Ltd. v. Additional Commissioner (Adjn.) CGST Delhi North & Ors. (2025 DHC 2656-DB), the Delhi High Court examined whether a large GST demand raised against a taxpayer—exceeding ₹10.86 crores—could stand when the adjudicating authority purportedly ignored the taxpayer’s written reply and personal‐hearing requests. The petition under Article 226 challenged the Order-in-Original dated 6 January 2025, which had confirmed the demand at an 18% tax rate on certain products without ever addressing the taxpayer’s submissions. The bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta considered whether principles of natural justice and the statutory scheme under Section 169 of the CGST Act, 2017 were properly followed.

2. Summary of the Judgment

The High Court found that:

The show-cause notice issued on 4 August 2024 carried a demand exceeding ₹10 crores based on classifying the petitioner’s products at an 18% GST rate.
Although the petitioner filed a detailed reply on 2 September 2024 (both online and in hard copy), the adjudicating authority’s order falsely recorded no response.
Multiple personal‐hearing notices sent by post were returned undelivered, and the authority proceeded ex parte without inviting the petitioner to appear by any alternative means.
On judicial review, the Court held that natural‐justice mandates under Section 169 were not complied with, since the petitioner’s response was never considered and submissible methods of service (e-mail, portal posting) were available.
The impugned Order-in-Original was set aside, and the matter remanded for a fresh hearing, with specific directions on service of notices and timeframes for adjudication.

3. Analysis

3.1. Precedents and Statutory Foundations

Although the judgment does not cite prior judicial decisions by name, it places central reliance on:

Section 169 of the CGST Act, 2017 – which mandates that no order adverse to a taxable person shall be passed unless they have been given a reasonable opportunity of being heard.
Constitutional jurisprudence on natural justice – the “audi alteram partem” rule, recognized by the Supreme Court in cases such as Maneka Gandhi v. Union of India, (1978) 1 SCC 248, dictates that statutory processes must afford parties fair notice and an opportunity to present their case.

3.2. Legal Reasoning

The Court’s reasoning unfolded in three logical stages:

Verification of Service and Reply: It was undisputed that the petitioner’s detailed reply was filed on time—both through the GST portal and by registered post. The adjudicating authority’s record to the contrary could not stand when the petitioner demonstrated electronic and hard‐copy proof.
Personal‐Hearing Requirement: While the authority sent postal notices for hearings, those were returned undelivered. The Court held that reliance solely on postal service, where alternatives existed (e-mail, GST portal), violated the duty to provide a meaningful hearing.
Remedial Direction: Under Article 226, the High Court set aside the order and remanded the case, specifying that fresh hearing opportunities be afforded—via portal, e-mail, and telephone—to ensure compliance with the statute and natural justice.

3.3. Impact on GST Adjudication

This decision reinforces critical safeguards in GST proceedings:

Tax authorities must diligently record and consider all written replies uploaded on the GST portal.
Where a postal hearing notice fails to reach its destination, alternative modes of communication (e-mail, SMS, portal notifications) are legally required to secure a valid hearing.
Ex parte adjudications premised on non‐service or non‐appearance will be vulnerable to judicial review if a bona fide reply or hearing request is overlooked.

4. Complex Concepts Simplified

Show-Cause Notice (SCN): A formal GST notice requiring a taxpayer to “show cause” why a proposed tax demand should not be confirmed.
Order-in-Original: The first adjudication order passed by the tax authority, after considering evidence and submissions.
Ex Parte: A decision made without hearing one party, often because they did not appear or were deemed unserved.
Personal Hearing (PH): An in-person or virtual opportunity for a taxpayer to present oral arguments before the adjudicating officer.
Article 226 of the Constitution: Empowers High Courts to issue writs for enforcement of fundamental rights or for any other purpose.

5. Conclusion

The Delhi High Court’s decision in M/s Perfetti Van Melle India Pvt. Ltd. v. Additional Commissioner (Adjn.) CGST Delhi North underscores that adherence to natural justice and statutory mandates is non-negotiable in GST adjudications. Tax authorities must not only issue show‐cause notices but also genuinely consider taxpayers’ replies and ensure meaningful hearings through reliable communication channels. This ruling will guide adjudicating bodies to bolster procedural fairness and reduce the risk of ex parte orders that can be quashed on judicial review.