Relying on its ‘civil death to the livelihood’ precedent in Galaxy Heights vs. Union of India [CWJC No. 4204 of 2025], the Patna High Court has held that fixing a personal hearing date before the expiry of the show-cause reply window is an empty formality. The Court laid down that Section 75(4) of the BGST Act mandates that an opportunity of hearing shall be granted only where a written request for hearing is received from the person chargeable with tax, or where any adverse decision is contemplated against such person. A bare reading of the provision makes it clear that the date for personal hearing is required to be fixed only after the expiry of the period for filing the show cause reply, or where the authority is not satisfied with the reply and contemplates an adverse order.
Accordingly, the Court clarified that fixing a hearing date prior to the expiry of the reply period renders the hearing an empty formality and violates the principles of natural justice. Further, where a taxpayer has demonstrated bonafide by subsequently filing all returns and paying all dues along with penalties, the appellate authority cannot dismiss the appeal solely on the ground of limitation without examining the merits, particularly when permanent cancellation of registration would result in civil death to the petitioner’s livelihood.
The Division Bench comprising Justice Rajeev Ranjan Prasad and Justice Ramesh Chand Malviya noted that the petitioner had already submitted all his returns in GSTR-3B and GSTR-1 and paid the entire due taxes along with late fees and penalties. Although the petitioner admittedly failed to file returns for six months, the Court observed that the respondent authorities had fixed the date for personal hearing only as an empty formality, since the hearing date was scheduled even before the expiry of the 30-day period granted for filing the show cause reply.
The Court further relied upon its earlier decision in M/s Galaxy Heights vs. Union of India (CWJC No. 4204 of 2025), wherein it had observed that a permanent cancellation of GST registration is likely to inflict “civil death” on the livelihood of the petitioner. The Court also noted that on two earlier occasions, the petitioner had been served with SCNs for cancellation of registration, but those were dropped upon receiving his response, indicating that the petitioner was not a habitual defaulter.
Briefly, M/s Super Enterprises, a proprietorship firm based in Muzaffarpur, Bihar, run by its sole proprietor Mr. Sanat Kumar, held a GST registration under the Bihar Goods and Services Tax Act, 2017 (BGST Act). Due to prolonged illness and resulting incapacity, the petitioner was unable to manage his business affairs and consequently failed to file GST returns for a continuous period of six months. A show cause notice (SCN) was uploaded on the GST portal, directing the petitioner to file his reply within 30 days. However, the date for personal hearing was fixed even earlier, which fell before the expiry of the reply period.
The petitioner’s consultant failed to inform him about the SCN, and no response was submitted. Thereafter, an ex parte order was passed by the Superintendent, CGST & Central Excise, Muzaffarpur East Range, cancelling the petitioner’s GST registration without specifying the period of default or assigning cogent reasons. The petitioner subsequently filed all pending returns in GSTR-3B and GSTR-1 and paid the entire due taxes along with late fees and penalties, demonstrating his bonafide intention to comply with statutory obligations. An appeal was preferred before the Additional Commissioner (Appeals), Muzaffarpur, which was rejected solely on the ground of limitation, without adjudicating the matter on merits.
