Vishal Jewellers Vs State of Punjab And Others (Punjab and Haryana High Court)
Summary: The Punjab and Haryana High Court allowed the writ petition filed by Vishal Jewellers challenging a GST adjudication order under Section 73 of the Punjab Goods and Services Tax Act, 2017. The order imposed GST liability after recording that the taxpayer’s explanation to the show cause notice (SCN) was unsatisfactory. The petitioner argued that the adjudicating authority had failed to provide adequate reasons for rejecting its explanation and sought fresh consideration through a reasoned order. The dispute concerned the validity of the adjudication process rather than the merits of the underlying tax liability. The requirement to consider the taxpayer’s response and pass a reasoned GST adjudication order was central to the proceedings.
The High Court noted that the matter had been adjourned on 6 July 2026 to enable State counsel to obtain instructions. Even after instructions were obtained, it could not be demonstrated that the petitioner’s response to the SCN had been considered. The Court held that merely describing the written explanation as unsatisfactory was insufficient. An adjudicating authority exercising a quasi-judicial function must address the specific issues raised before it and provide adequate reasons for its conclusions. This requirement of a speaking order and meaningful consideration of taxpayer submissions is fundamental to fair adjudication. The Court also referred to a coordinate Bench decision in CWP No.16293 of 2024, decided on 25 May 2026, where an adjudication order had similarly been set aside and remitted for reconsideration.
Following the earlier decision and its own findings, the High Court allowed the petition, set aside the impugned orders and remitted the matter to the adjudicating authority for fresh consideration in accordance with law. All pending miscellaneous applications were disposed of. The Court did not decide whether the GST demand was substantively payable. The ruling reinforces that an unreasoned rejection of an SCN reply cannot substitute for valid quasi-judicial adjudication.
Cases Discussed
Punjab and Haryana High Court, CWP No.16293 of 2024 — Decided on 25.05.2026. The coordinate Bench set aside an adjudication order and remitted the matter for fresh consideration in similar circumstances. The case name is not specified in the supplied judgment. The decision is also discussed in a subsequent Punjab and Haryana High Court ruling.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. This petition is directed against an order passed under Section 73 of the Punjab Goods and Services Tax Act, 2017, holding the petitioner liable to payment of GST after observing that the petitioner’s explanation to the Show Cause Notice (SCN) was not found satisfactory. The order is challenged on the ground that adequate reasons have not been assigned for the non-acceptance of the petitioner’s explanation to the SCN and, therefore, the reasons, which are the soul of the order, are missing. It is, therefore, submitted that in such circumstances, the authority concerned be directed to consider the petitioner’s response to the SCN, on merits, and pass an appropriate reasoned orderin accordance with law.
2. The matter was adjourned on 06.07.2026 by us in order to enable the learned State counsel to obtain instructions. Learned State counsel has obtained instructions, and it could not be shown that the petitioner’s response to the SCN was accorded any consideration. Merely stating that the written explanation is not satisfactory would not suffice. An adjudicating authority, while exercising aquasi-judicial function,, is expected to deal with the specific issues urged before it, and merely stating that the explanation is not satisfactory cannot subserve the purpose of a valid adjudication.
3. In somewhat similar facts and circumstances, a Co-ordinate Bench of this Court, in CWP No.16293 of 2024 decided on 25.05.2026, also set aside the adjudication order and remitted the matter to the concerned authority for fresh consideration.
4. Following the order passed in CWP No.16293 of 2024, as well as for the reasons recorded above, this petition succeeds and is allowed. The impugned orders are set aside, and the matter stands remitted to the adjudicating authority for fresh consideration of cause in accordance with law.
5. All pending miscellaneous application(s), if any, shall also stand disposed of.
