Ex Parte GST Adjudication Order & Garnishee Proceedings Quashed, Fresh Hearing Directed: Calcutta HC

Raju Ghosh Vs State of West Bengal & Ors. (Calcutta High Court)

Material Facts

The petitioner challenged the appellate order dated 22.05.2026 passed under Section 107 of the West Bengal Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017 for the period July 2017 to March 2018. The petitioner also challenged the ex parte adjudication order dated 18.12.2023 passed under Section 73 of the WBGST Act, 2017 and two recovery notices dated 20.02.2026.

A notice in Form GST DRC-01 dated 21.09.2023 was issued requiring the petitioner to show cause regarding payment of tax, interest and penalty. According to the petitioner, the notice and subsequent adjudication order were uploaded only under the “Additional Notices and Orders” tab on the GST portal. The petitioner submitted that an adjournment had been sought but was not reflected in the adjudication order, that the personal hearing date mentioned in the show cause notice preceded the date for filing the reply, and that the petitioner remained unaware of the adjudication order. The disputed tax amount of ₹40,07,880 had already been recovered from the Electronic Credit Ledger.

Procedural History

The petitioner challenged the appellate order under Section 107, the ex parte adjudication order under Section 73, and the consequential recovery notices by filing the present writ petition.

Legal Issues

• Validity of the appellate order dated 22.05.2026.
• Validity of the ex parte adjudication order dated 18.12.2023 under Section 73 of the WBGST Act, 2017.
• Validity of the consequential recovery notices dated 20.02.2026.
• Whether procedural irregularities justified interference and remand.

Relevant Statutory Provisions

• Section 73, West Bengal Goods and Services Tax Act, 2017.
• Section 107, West Bengal Goods and Services Tax Act, 2017.
• Central Goods and Services Tax Act, 2017.

Parties’ Submissions

Petitioner

The petitioner submitted that the show cause notice and adjudication order were uploaded only under the “Additional Notices and Orders” tab, that an adjournment request was ignored, the hearing date was fixed before the reply date, and the adjudication order was passed ex parte. Since the entire disputed tax had already been recovered, the petitioner sought reconsideration of the adjudication, remand to the adjudicating authority and setting aside of the recovery notices.

State

The State submitted that only the tax amount had been recovered from the Electronic Credit Ledger, with no recovery towards interest or penalty. It also contended that the petitioner had already challenged the adjudication order before the appellate authority and the matter had attained finality.

Court’s Findings and Reasoning

The Court found that the petitioner had established a prima facie case warranting interference. It noted that both the show cause notice and adjudication order had been uploaded only under the “Additional Notices and Orders” tab, resulting in the petitioner being deprived of knowledge of the proceedings, which constituted a violation of the principles of natural justice.

The Court observed that since the entire disputed tax had already been recovered, the ends of justice would be served by granting the petitioner an opportunity of hearing. It rejected the State’s contention that the matter had attained finality in view of the procedural irregularities.

Final Ruling

The Calcutta High Court quashed and set aside the appellate order dated 22.05.2026, the ex parte adjudication order dated 18.12.2023 and the consequential recovery notices, holding that the petitioner could not be held liable under an ex parte adjudication order. The matter was remanded to the adjudicating authority to reconsider the case, pass a reasoned and speaking order after affording an opportunity of personal hearing, communicate the decision to the petitioner, and complete the exercise on or before 30.09.2026. The Court clarified that it had not examined the merits and that the adjudicating authority should take an independent decision uninfluenced by the observations in the order.

Appellant was represented by: Mr. Himangshu Kumar Ray, Ms. Shiwani Shaw,  Ms. Piyas Chowdhury

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

1. Affidavit-of-service filed in Court today is taken on record.

2. None appears on behalf of the State-respondents in Court today.

3. MsManasiMukherjee, learned Junior Government Advocate with Mr. Bijitesh Mukherjee, learned Junior Government Advocate are engaged in this matter on behalf of the State. Their appearances be regularized accordingly from the office of the Legal Remembrancer.

4. The present Writ Petition has been filed challenging inter alia, the legality and the validity of the Appellate Order dated 22.05.2026 passed by the respondent No. 8 under Section 107 of the West Bengal Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017 (hereinafter referred to as the said Act for the sake of brevity and convenience) for the period from July 2017 to March 2018. The petitioner also challenges the ex parte adjudication order dated 18.12.2023 passed under Section 73 of the WBGST Act, 2017 and two recovery notices dated 20.02.2026.

5. The Learned Counsel appearing for the petitioner submits as follows:

a. That a notice in Form GST DRC-01 bearing Ref. No. ZD1900230351849 dated 21.09.2023 has been issued to the registered tax payer requiring the petitioner to show cause as to why he should not pay the amount specified in the said notice along with interest and penalty.

b. That the said intimation has been uploaded on the GST portal under the Tab “Additional Notices and Orders”. Subsequent thereto the same has been served upon the petitioner through speed post.

c. That upon receipt of the Show Cause Notice the petitioner prayed for an adjournment, a fact that has not been reflected in the order of adjudication.

d. That the date of the personal hearing mentioned in the Show Cause Notice has been fixed prior to the date of the filing of the reply.

e. That an ex parte adjudication order dated 18.12.2023, passed under Section 73 of the WBGST Act 2017, has been passed against the petitioner by the respondent No. 5.

f. That although the order of adjudication has been uploaded on the GST portal under the tab “Additional Notice and Orders”, the petitioner has not been aware of the order passed by the adjudicating authority.

g. That the respondent authority has already recovered the entire disputed tax amounting to Rs 40,07,880/- from the Electronic Credit Ledger.

h. The petitioner prays for a reconsideration of the order of adjudication since the entire disputed tax has been recovered, and the interest of the revenue will not be prejudiced thereby.

i. The petitioner also prays that the matter to be remanded back to the adjudicating authority for fresh consideration of the issues involved therein, and also to set aside the two recovery notices both dated 20th February 2026.

6. The Learned Counsel appearing for the State respondent submits as follows:

A) That the entire amount has been recovered on account of tax from the electronic credit ledger without any recovery being made towards interest and penalty.

B) The petitioner has already participated in the proceedings by challenging the order of adjudication by preferring an appeal before the appellate authority which has already attained finality.

7. Having heard the parties and upon the considering the materials available on record, this court finds that the petitioner has been able to make out a prima facie case warranting interference at this stage.

8. The court also noted that the Show Cause Notice as well as the Adjudication Order has been uploaded only under the Tab “Additional Notices and Orders”, resulted in the petitioner being deprived of knowledge of the proceedings, which constitutes a violation of principles of natural justice.

9. Since the entire disputed tax has already been recovered, the ends of justice would be made if an opportunity of hearing is granted to the petitioner.

10. The contention of the State that the matter has attained finality, cannot be accepted in light of the procedural irregularities noted above.

11. In view of the above, this court passes the following directions.

a) The orders passed by the appellate authority and the adjudicating authority dated 22.05.2026 and 18.12.2023 respectively along with the consequential notices are hereby quashed and set aside, since the petitioner cannot be held liable under adjudication order passed ex parte.

c) The respondent No. 5 is directed to reconsider the case of the petitioner and pass a reasoned and speaking order in accordance with law upon affording an opportunity of personal hearing to the petitioner. The decision so arrived at shall be communicated to the petitioner forthwith.

d) The entire exercise shall be completed by the respondent No. 5 on or before 30th September 2026. The petitioner shall cooperate with the respondent No. 5 and shall not seek any further adjournment.

12. It is made clear since this court has not gone into the merits of the case, the respondent No. 5 shall not be influenced by any observation made in this order and is at liberty to take an independent decision to consider the issue involved herein.

13. With the above observations and directions, the Writ petition is disposed of since affidavit has not been called for.

14. Urgent Photostat certified copy of this order, if applied for, be supplied to the parties on priority basis upon compliance of all requisite formalities.