"Three Adjournments" Under GST: A Ceiling, Not a Right - Supreme Court’s MHJ Metaltechs Order Sets the Record Straight

When is "three" not a promise but a hard stop? In GST adjudication, the Supreme Court has clarified that the maximum of three adjournments in Section 75(5) of the CGST Act is a cap, not a guaranteed quota every assessee can demand. In M/s MHJ Metaltechs Pvt. Ltd. v. CGST, Delhi South [2025(05)LCX0124], the Court dismissed the assessee’s Special Leave Petition (SLP), endorsing the Delhi High Court’s view that authorities may grant up to three adjournments - but need not grant all three - and that illegible copies or other procedural gripes, absent demonstrable prejudice, do not automatically vitiate proceedings. The Court declined to exercise Article 136 discretion given the statutory appellate route, while permitting the assessee to pursue appeal within an extended window.

The case in a nutshell

Backdrop & allegations. The department alleged that MHJ Metaltechs wrongfully availed ITC (about Rs. 7.08 crore) as part of a larger Rs. 155-crore GST fraud. After show-cause and adjudication, the assessee sought multiple adjournments and later complained of illegible documents. The authorities insisted proceedings complied with Section 75(5) - limiting adjournments to three - and that the materials provided were sufficient. The Delhi High Court rejected the writ, holding that Section 75(5) imposes a maximum adjournment limit and does not promise three hearings; the "illegible documents" point did not, on facts, show denial of natural justice. The assessee approached the Supreme Court via SLP.

What the Supreme Court did. The Court condoned a short delay in refiling but declined to exercise Article 136, pointing the assessee to the statutory appellate channel. Crucially, it approved the Delhi High Court’s interpretation: Section 75(5) sets a cap of three adjournments, not a minimum entitlement. It also signalled that complaints about document legibility, without proven prejudice, will not ipso facto undo adjudication. The Court allowed liberty to appeal and (as reported) extended time to file appeal up to October 15, 2025.

The text of Section 75(5): Why words matter

Section 75(5) states that when "sufficient cause" is shown, the proper officer may adjourn "for reasons to be recorded," and no such adjournment shall be granted for more than three times. Two phrases do the heavy lifting:

1. "If sufficient cause is shown" - a merits-based gateway, not an automatic pass.

2. "No more than three times" - a hard upper limit.

Nowhere does the provision say that three hearings must be granted. It is a discretionary allowance subject to reasons and case-specific cause, bounded by a statutory ceiling.

The Delhi High Court’s through-line - now endorsed

Before the SLP, the Delhi High Court had drawn the same line: maximum three adjournments ≠ minimum three hearings. In other words, the statute prevents more than three, but never compels all three. That articulation now has the Supreme Court’s imprimatur.

The High Court also disposed of a connected writ by granting liberty to file appeal under Section 107 within a set time (till July 15, 2025), exemplifying its preference for the statutory route over writ intervention in high-value fraud-allegation matters. The Supreme Court maintained the same remedial discipline while extending time to October 15, 2025.

Article 136: Not a parallel appeals highway

The Supreme Court reiterated a familiar but vital principle: Article 136 is discretionary, reserved for exceptional cases; it is not a substitute for Sections 107/108 appellate remedies under the CGST Act. Where a statutory ladder exists, start by climbing it. This is doubly true in matters involving alleged large-scale ITC fraud where factual appreciation and record-building belong in the appellate forum.

Natural justice and "illegible documents": the prejudice test

The Court declined to treat allegations of "illegible documents" as a silver bullet. Procedural defects invalidate proceedings only when they cause material prejudice. Taxpayers must spell out how the alleged irregularity harmed their ability to meet the case - for instance, identify what was unreadable, why it mattered, and how it impaired the reply or hearing. A generic lament about legibility will rarely suffice. This aligns with the broader administrative law approach: substance over form, fairness over formalism.

What "maximum three" means in day-to-day practice

Think of Section 75(5) as a two-step gate keeping rule:

1. Threshold - The taxpayer shows "sufficient cause" (e.g., hospitalization, a sudden data-room crash, counsel’s unavoidable conflict, or genuinely voluminous third-party material requiring time). The officer records reasons and may grant an adjournment.

2. Limit - Even with cause, the statute caps total adjournments at three. Past that, the door is closed.

Key practice takeaways for taxpayers:

• Don’t treat "three" as a right. Ask only when you truly need time - and substantiate why.

• Paper the record. Each request should be specific, supported by documents (medical certificates, forensic IT reports, third-party correspondence), and tethered to the issues in the SCN.

• Prefer "effective hearing" over "more dates." Use whatever date you have to put forward complete, structured submissions with evidence and a short issues-list. If you need one more date for a narrowly defined task (e.g., bank statements awaited), say so precisely.

• Legibility issues? Immediately identify specific pages, ask for re-scans/inspection, and demonstrate prejudice (e.g., "Page 47 contains vendor-wise mismatch relied upon; unreadable columns prevented cross-verification."). Record your requests in writing.

For officers:

• Reasoned orders on adjournment. Briefly record why cause is (or isn’t) sufficient.

• Track the count. Note how many adjournments have been granted; avoid crossing the ceiling.

• Ensure "effective opportunity." Even if you don’t give three hearings, ensure the taxpayer had a realistic chance to meet the case: access to relied-upon documents, inspection where necessary, and time commensurate with complexity.

Myth v. Fact

• Myth: Section 75(5) guarantees three personal hearings.
  Fact: It permits up to three adjournments upon sufficient cause. There is no guarantee of three.

• Myth: If any document is blurry, the order is automatically void.
  Fact: Only prejudicial irregularities that undermine fairness vitiate proceedings; trivial defects do not.

• Myth: You can skip appeals and run to the Supreme Court under Article 136.
  Fact: The Supreme Court rarely supplants statutory appeals with Article 136. Use the ladder first.

Compliance roadmap after MHJ Metaltechs

1. Audit your hearing strategy early. On receiving the SCN, map issues, evidence, witnesses, and data dependencies. Identify what, if anything, may require a targeted adjournment.

2. Front-load submissions. File a full written reply, annexures indexed and paginated, with a concise propositions note (issues, statute, facts, case-law).

3. If you seek an adjournment, make it purpose-built ("We need 10 days to obtain CA-certified reconciliation of vendor GSTR-1 v. our 2A/2B for Q3 FY23; attached emails show vendors’ confirmation pending").

4. Document defects? Ask for fresh copies/inspection immediately. Keep a trail: emails, insurer-style incident logs ("scanner DPI too low on pages X–Y"), and a prejudice paragraph.

5. Hit the ceiling? If three adjournments are exhausted, don’t push for a fourth. Instead, file your best case on the record and preserve objections for appeal.

6. Appeal timelines. Track Section 107 deadlines and any judicial extensions (here, liberty to appeal and extensions were granted first by the High Court and later by the Supreme Court through October 15, 2025, on the case’s facts).

Why this matters beyond this case

The ruling harmonises procedural discipline with fairness. By treating "three adjournments" as a ceiling, it nudges both sides toward effective, early engagement with the merits. For taxpayers, the message is clear: build your record, seek time only when truly necessary, and show why. For the department, maintain reasoned discretion - grant adjournments when cause exists, but resist serial delays.

Equally, the Court’s stance on Article 136 - that it won’t displace the CGST appeal framework absent exceptional circumstances - guards against short-circuiting the statutory scheme. Complex factual disputes (like layered ITC fraud allegations) belong in forums designed to parse facts, take additional evidence, and apply nuanced standards of proof.

The narrow, durable holding

• Adjournments: Section 75(5) permits up to three adjournments upon sufficient cause; it does not mandate three.

• Natural justice: Only prejudicial procedural lapses undermine adjudication. Routine defects (like minor legibility issues) without prejudice do not.

• Forum discipline: Use Section 107/108 appeals first; Article 136 is not a parallel remedy.

• Relief route: On the facts here, liberty to appeal was preserved and the outer time was extended up to October 15, 2025.

Practical checklist for your next GST hearing

• □ SCN analysed; issues-list prepared; evidence map created.

• □ One crisp written reply with annexures + propositions note filed.

• □ Adjournment requests (if any) are specific, supported, and tracked (1/3, 2/3, 3/3).

• □ Legibility/record access issues raised early; inspection sought; prejudice explained.

• □ Final hearing used for substance, not scheduling; oral submissions keyed to your written note.

• □ Appeal diary opened on day of order; limitation and pre-deposit strategized.

Closing thought

Effective hearing matters more than the number of dates. MHJ Metaltechs cements that Section 75(5) is a guardrail against delay, not a three-coupon booklet for adjournments. Use dates wisely, build a robust record, and take the statutory appellate road when needed - that’s now firmly the Court-approved way.

Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.