Jai Durga Security Force Vs Finance Department (Bombay High Court)
The Bombay High Court, in the matter concerning Jai Durga Security Force versus the Finance Department, addressed the legality of an adjudication order passed under the CGST/MGST Act, 2017. The petitioner challenged the order on the ground that no proper personal hearing was provided before the adverse decision was made, invoking Section 75(4) of the Act, which mandates an opportunity of hearing when an adverse decision is contemplated. The issue arose from a show-cause notice issued by the Assistant Commissioner of State Tax under Section 73(1) of the Act, dated 09.05.2024, requiring the petitioner to file a reply by 10.06.2024. The impugned order, dated 13.06.2024, concluded that the petitioner had failed to submit a reply and directed payment of tax assessed therein.
The petitioner argued that despite the show-cause notice, the law required a separate opportunity for a personal hearing before passing the adverse order. Section 75(4) explicitly requires that a person must be given an opportunity of hearing in two scenarios: (i) when a written request is made by the person chargeable with tax or penalty, or (ii) when an adverse decision is contemplated against the person. The petitioner’s case fell squarely within the second category, as the adjudicating authority had intended to pass an adverse order regarding the tax liability.
