Case Law Details
Hudson Insurance Brokers Private Limited Vs Union Territory of Chandigarh And Others (Punjab and Haryana High Court)
Non-speaking GST Orders Violate Natural Justice Principles and are Liable to be Set Aside: Punjab and Haryana High Court
The Punjab and Haryana High Court held that a GST assessment order passed without considering the taxpayer’s reply and without assigning reasons is a non-speaking order that violates the principles of natural justice and is liable to be set aside. The petitioner had submitted detailed replies along with supporting documents in response to notices issued under Sections 61 and 73 of the CGST Act, yet the adjudicating authority merely acknowledged the reply and rejected it without discussing the contentions or evidence. The Court observed that quasi-judicial authorities are duty-bound to examine the taxpayer’s submissions and provide reasoned findings for accepting or rejecting them. Although an appellate remedy was available, the Court reiterated that writ jurisdiction under Article 226 can be invoked where there is a breach of natural justice. Accordingly, the impugned GST demand order was quashed, and the authority was directed to grant a personal hearing and pass a fresh, reasoned order after duly considering the petitioner’s reply and supporting documents.
Facts:
Hudson Insurance Brokers Private Limited (“the Petitioner”), a company engaged in the business of insurance brokerage and advisory services and duly registered under GST, filed returns for the relevant period.
The Union Territory of Chandigarh and Others (“the Respondent”), through the Commercial Tax Officer, issued a notice under Section 61 of the CGST Act pointing out discrepancies and subsequently issued a show cause notice under Section 73.
The Petitioner contended that it had submitted a detailed reply along with all relevant supporting documents on the GST portal within the stipulated time and also sought extension and adjournment for personal hearing, which was later complied with by filing reply.
The Respondent contended that the writ petition was not maintainable due to availability of alternative remedy of appeal and further argued that the impugned order was passed after considering the reply and due to failure of the Petitioner to furnish requisite documentary evidence.
The Petitioner’s grievance was that despite submission of detailed reply and documents, the impugned order dated February 14, 2026 was passed without considering the same and without assigning any reasons, thereby violating principles of natural justice, leading to filing of the present writ petition under Article 226 of the Constitution of India.
Issue:
Whether an order passed under GST without considering the reply of the assessee and without assigning reasons is sustainable in law, and whether writ jurisdiction can be invoked despite availability of alternate remedy?
Held:
The Hon’ble Punjab and Haryana High Court in CWP-8559-2026 held as under:
- Observed that, the impugned order acknowledges the filing of reply by the Petitioner but rejects it without assigning any reasons.
- Noted that, the satisfaction recorded by the authority that the taxpayer has not furnished any documentary evidence is not supported by any reasoning.
- Observed that, no contention raised by the Petitioner nor documents attached with the reply were considered, referred to, or dealt with in the impugned order.
- Held that, an order passed without any reasoning cannot be justified and is a non-speaking order violative of principles of natural justice.
- Observed that, authorities exercising quasi-judicial powers are bound to consider the reply and give reasons for not agreeing with the contentions raised.
- Noted that, although ordinarily writ jurisdiction is not exercised where alternate remedy exists, exceptions arise where there is violation of principles of natural justice.
- Further noted that, the impugned order being non-speaking and violative of natural justice cannot be sustained.
- Directed that, the impugned order be set aside and the Respondent is directed to grant personal hearing and pass a fresh order with due reasoning after considering the reply and submissions of the Petitioner and allowed the writ petition.
Our Comments:
The judgment reinforces the settled principle that reasoned orders are an indispensable component of quasi-judicial functioning. The judgment of the Supreme Court in Whirlpool Corporation vs Registrar of Trademarks [(1998) 8 SCC 1] establishes that writ jurisdiction is maintainable where there is violation of principles of natural justice. Similarly in the case of Radha Krishan Industries vs State of Himachal Pradesh [(2021) SCC Online 334] reiterates that availability of alternate remedy does not bar writ jurisdiction in cases of jurisdictional error or breach of natural justice. Further the judgment in the case of Godrej Sara Lee Ltd. vs Excise and Taxation Officer [(2023) SCC OnLine SC 95] affirms that non-speaking orders are unsustainable. The reasoning in the present case aligns with these precedents by emphasizing that mere acknowledgment of reply without dealing with it amounts to denial of fair hearing.
Relevant Provisions:
Article 226 of the Constitution of India
“Power of High Courts to issue certain writs
(1) Notwithstanding anything in article 32 every High Court shall have powers, throughout the territories in relation to which it exercise jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warrantor and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose.
…”
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
Petitioner has filed the present writ petition under Articles 226/227 of Constitution of India being aggrieved by impugned order dated 24.12.2025 (Annexure P-1), passed by Commercial Tax Officer, Ward-3, Chandigarh (respondent No.2), whereby GST demand has been raised against the petitioner.
2. Petitioner is a company engaged in the business of insurance brokerage and advisory within financial and insurance service sector and is duly registered under GST regime. Notice under Section 61 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘CGST Act’) read with Union Territory Goods and Services Tax Act, 2017 (hereinafter referred to as ‘UTGST Act’) dated 11.08.2025 (Annexure P-2) was issued by respondent No.2 while scrutinizing returns filed by petitioner for the relevant period i.e. year 2021-22 alleging certain discrepancies in the return and calling upon petitioner to furnish explanation and clarification thereon by 25.08.2025 for the discrepancies. In response to notice dated 11.08.2025 (Annexure P-2), petitioner claims to have submitted detailed reply in Form GST-ASMT-11 along with all the relevant documents on 25.08.2025 (Annexure P-3). Despite detailed reply, respondent No.2 issued show cause notice (Annexure P-4) in terms of Section 73(1) of CGST Act read with, UTGST Act. In show cause notice dated 26.09.2025, respondent No.2 had alleged that reply was not found satisfactory as relevant/supporting documents essential for verification of discrepancies were not uploaded.
3. Petitioner vide said show cause notice was directed to submit its eply within 30 days and to appear for personal hearing on 17.10.2025. However, petitioner sought extension of time for filing its reply and also sought adjournment of personal hearing vide its letters dated 13.10.2025 and 16.10.2025 (collectively Annexure P-7). Respondent No.2, however, issued reminder notice dated 27.10.2025 to submit its reply by 04.11.2025 and to attend personal hearing on 03.11.2025. However, as per petitioner it missed to reply to the said reminder notice and requested another opportunity for filing reply and for personal hearing. Subsequently, petitioner had duly filed reply to said show cause notice in Form GST-DRC-06 along with supporting documents on GST portal on 26.11.2025 (Annexure P-5). It is the case of petitioner that despite detailed reply, respondent No.2 proceeded to pass the impugned order confirming demand of Rs.13,42,051/- against the petitioner without considering submissions made therein.
4. The simple case of petitioner in the present case is that the impugned order dated 24.12.2025 (Annexure P-1) raising demand of Rs.13,42,051/- has been passed without considering reply filed by petitioner on 26.11.2025. Petitioner is challenging the impugned order on the ground that same is a non-speaking order and violative of principles of natural justice as it neither deals nor assigns any reason for rejecting the detailed submissions and documentary evidence placed on record by petitioner in its replies to GST-ASMT-11 and show cause notice seeking quashing of impugned order dated 24.12.2025 (Annexure P-1).
5. On the other hand, learned counsel for respondents has argued that present writ petition is not maintainable as alternative remedy of appeal is available to the petitioner. It is further argued that the impugned order has been passed by the authorities after considering the reply and on account of failure of petitioner to submit requisite documents.
6. Perusal of impugned order dated 24.12.2025 (Annexure P-1) goes to show that authorities have not taken into consideration reply dated 26.11.2025, though authorities in para No.5 had acknowledged reply by petitioner dated 26.11.2025, but had rejected the same only by asserting that same does not adequately address the issue raised in show cause notice. It was also claimed that tax payer had not furnished any documentary evidence on record or supporting material to substantiate submissions made in reply and had concluded that in absence of any satisfactory reply, the demand raised as per show cause notice has to be confirmed.
7. Generally, Courts while exercising writ jurisdiction under Article 226 of Constitution of India do not interfere with orders which are appealable before appropriate authority. However, availability of alternative remedy does not operate as a complete bar to exercise writ jurisdiction under Article 226 of Constitution of India. There are exceptions to general rule of non-interference and Courts are bound to interfere if writ petition is filed for enforcement of any fundamental right or where there has been violation of principle of natural justice or where the order of proceedings are wholly without jurisdiction or vires of the Act are under challenge. In the event of any of these eventualities, exercise of writ jurisdiction by Court is fully justified and rather Courts are bound to act and ensure compliance of fundamental rights/principle of natural justice/jurisdiction vested in the authority. This view of mine finds support from judgments cited by learned counsel for petitioner titled as Whirlpool Corporation Vs. Registrar of Trademarks, Mumbai, 1998 (8) SCC 1, Radha Krishan Industries Vs. State of Himachal Pradesh, 2021 SCC Online SC 334, Godrej Sara Lee Ltd. Vs. Excise and Taxation Officer-cum-Assessing Authority & Ors., 2023 SCC OnLine SC 95 and Prodair Air Products India Private Limited Vs. State of Kerala, 2023 (3) KHC 1.
8. Therefore, it has to be seen whether in passing the impugned order dated 24.12.2025 (Annexure P-1) respondents have failed to adhere to principle of natural justice or not. Perusal of the impugned order (Annexure P-1) goes to show that petitioner had duly submitted its reply along with relevant/requisite documents on GST portal on 26.11.2025. This fact stands acknowledged not only by acknowledgment slip annexed with the petition by the petitioner, but also by acknowledgment by authorities in para No.5 of the impugned order. However, perusal of order goes to show that no reasonsfor not finding reply and documents annexed with reply uploaded on portal to be satisfactory have been given. The satisfaction recorded by authority that “taxpayer has not furnished any documentary evidence, records or supporting material to substantiate the statement made in the reply” has not been supported by any reasoning. No contention raised by petitioner or documents attached with reply dated 26.11.2025 has been noted, referred to or dealt with. The satisfaction so recorded by authorities below was required to be based upon reasoning which ought to have been reflected by way of impugned order. An order passed without any reasoning cannot be justified and can only be held to be a non-speaking order and violative of principles of natural justice. Authorities exercising quasi judicial or judicial powers are bound to consider reply so preferred by assessee and are bound to give reasons for not agreeing to the contentions raised in the reply. An order without reasoning cannot be sustained and amounts to violation of principles of natural justice.
9. Impugned order in the present case is without there being any reasoning, hence is a non-speaking order being violative of principles of natural justice and cannot be sustained. Accordingly, impugned order dated 24.12.2025 (Annexure P-1) is set aside. Respondent No.2 is directed to fix a date for personal hearing of the petitioner and after giving a chance of personal hearing to petitioner may decide show cause notice with due reasoning for acceptance/rejection of contentions raised by the petitioner in its reply dated 26.11.2025 and submissions made at the time of personal hearing.
10. Writ petition is allowed in above terms.
11. Pending application(s), if any, is/are disposed of accordingly.
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