Harphool Chowdhury @ Harphool Choudhary Vs State of West Bengal & anr. (Calcutta High Court)
Summary: The Calcutta High Court considered a writ petition challenging an order dated 14th December, 2023 passed under Section 73 of the WBGST/CGST Act, 2017 for the tax period of July 2017 to March 2018. The petitioner challenged the order principally on the ground that, although the show-cause notice issued in Form GST DRC 01 dated 31st August, 2023 contemplated an adverse order, the petitioner was not afforded an opportunity of hearing. The petitioner contended that the order was consequently vitiated for non-compliance with Section 75(4) of the said Act.
It was also submitted that the petitioner could not identify the order in time to prefer a statutory appeal. Attention was drawn to a notice dated 27th July, 2026 issued in Form GST DRC 13 and a notice dated 14th August, 2026, with the submission that the bank account had been attached and the entire demand on account of tax had already been realized. The State respondents and the bank were represented. The Court found that the statutory scheme provides an opportunity of hearing where an adverse decision is contemplated and noted that, in the instant case, it was undisputed that no opportunity of hearing had been afforded despite the show-cause notice itself contemplating an adverse order.
The Court therefore held that the impugned order dated 14th December, 2023 could not be sustained. Since the entire demand had already been realized, the Court considered it prudent to remand the matter to the proper officer, permitting the petitioner to file a response to the show-cause notice within two weeks. The proper officer was directed to decide the matter after considering the Court’s observations, providing an opportunity of hearing in accordance with Section 75(4), and passing a reasoned order. The Court further directed that the demand already realized would remain subject to the result of the proceedings before the proper officer. The order of attachment issued by the respondents was quashed, and the writ petition was disposed of with the above observations and directions.
Petitioner Was Represented By: Mr. Himangshu Kr. Ray
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
The affidavit-of-service filed in Court today is taken on record.
2. Challenging the order passed under Section 73 of the WBGST/CGST Act, 2017 (hereinafter referred to as the said Act) dated 14th December, 2023 for the tax period of July 2017 to March, 2018, the instant writ petition has been filed.
3. Mr. Roy, learned advocate representing the petitioner by drawing attention to this Court to the show-cause notice issued in form DRC 01 dated 31st August, 2023 would submit that the petitioner was not afforded with an opportunity of hearing though an adverse order was contemplated against the petitioner at the show-cause stage. According to him, the order passed by the respondents stand vitiated on the ground of non-compliance of Section 75 (4) of the said Act.
4. The State respondents and the bank are represented.
5. Having heard the learned advocates appearing for the respective parties, I find that the Scheme of the said Act, inter alia, provides for an opportunity to the person chargable with tax and penalty to pray for any opportunity of hearing or where an adverse decision is contemplated against such person, to be entitled with an opportunity of hearing. In the instant case, none has disputed the fact that the petitioner was not afforded with any opportunity of hearing though the show-cause itself contemplated of an adverse order being passed. In the peculiar facts, I am of the view that the impugned order dated 14th December, 2023 cannot be sustained. Further, noting that the entire demand has already been realized, in my view, it shall only be prudent to remand the matter back to the proper officer and to permit the petitioner to file a response to the show-cause. If such response is filed within a period of two weeks from date or if, no such response is filed, the proper officer having regard to the observations made herein, in accordance with Section 75(4) of the said Act, shall decide on the same after giving an opportunity of hearing to the petitioner in accordance with law by passing a reasoned order.
6. It is made clear if, on the basis of the decision to be taken by the proper officer it transpires that any additional amount has been released, the said amount should be reversed. Thus, the demand already realized shall be subject to the result of the proceeding before the proper officer.
7. As a sequel thereto, the order of attachment issued by the respondents also stands quashed.
8. With the above observations and directions, the writ petition is disposed of.
