Limra Traders Vs State of Jharkhand (Jharkhand High Court)
Jharkhand High Court ruled that tax authorities must follow the due process before passing adjudication orders under the Jharkhand Goods and Services Tax Act, 2017 (JGST Act). The petitioners, Limra Traders, challenged the assessment orders on the grounds that they were issued without providing an opportunity for a personal hearing, violating Sections 75(4) and 75(5) of the JGST Act. The court found that in both cases, show-cause notices were issued, but ex-parte adjudication orders were passed on the very first date of compliance. This procedural lapse rendered the tax demands invalid. The court also referred to its earlier ruling in M/s. Godavari Commodities Limited, which emphasized the importance of a fair hearing before imposing tax liabilities. Despite those directions, tax authorities continued to violate these legal provisions, leading to repeated litigation.
The court quashed the impugned adjudication orders and imposed a cost of ₹1,00,000 per writ petition on the respondents. It directed the authorities to ensure proper procedural adherence in future tax assessments. While the tax department retains the right to initiate fresh proceedings, such actions must comply with legal requirements, including granting affected parties the opportunity to be heard. The ruling reinforces the importance of following statutory procedures to prevent arbitrary taxation and safeguard taxpayer rights.
