Warmmax India Vs Commissioner of the SGST and Another (Jharkhand High Court)
Summary: The High Court considered a writ petition challenging the GST demand order dated 27 April 2024 passed by the respondent authority under Section 73 of the GST Act. The petitioner sought quashing of the impugned order through a writ of certiorari and also prayed for directions restraining the Department from recovering any amount without providing a proper opportunity of personal hearing. The petitioner’s counsel submitted that the order had been passed without granting any opportunity of hearing, thereby violating the principles of natural justice. It was further contended that where the GST authorities contemplate passing an order adverse to the interests of an assessee, an opportunity of personal hearing is required. Accordingly, the petitioner argued that the impugned order was legally unsustainable because the mandatory procedural requirement had not been followed.
The Revenue’s Standing Counsel was unable to demonstrate before the High Court that any opportunity of personal hearing had been granted to the petitioner before passing the disputed order. Considering this position, the Court found the petitioner’s contention regarding denial of hearing to be sustainable. Consequently, the High Court quashed the GST order dated 27 April 2024, holding that the matter required reconsideration after providing the petitioner with a proper opportunity of hearing. However, instead of finally determining the underlying GST liability, the Court granted liberty to the Department to pass a fresh order after complying with the requirement of personal hearing. Any pending application was also disposed of. The decision emphasises that an adverse GST adjudication order cannot be sustained where the taxpayer has been denied a proper opportunity of personal hearing, and that the Department must observe the principles of natural justice while undertaking fresh adjudication.
FULL TEXT OF THE ORIGINAL JUDGMENT/ORDER OF HIGH COURT
1. The present petition has been filed praying for the following reliefs:-
“i. Issue a writ, order or direction, in the nature of certiorari calling the record of the case and quash the order dated 27.04.2024 (Annexure No. 2) passed by the respondent no. 2 U/ s 73 of the GST Act.
ii. Issue a suitable writ, order or direction in the nature of mandamus commanding the respondent not recover any amount and direct the respondent no. 2 any amount to provide opportunity of personal hearing before passing any fresh order.”
2. Ms. Shabnam, learned counsel holding brief of Mr. Bailal Ahmad, learned counsel for the petitioner submits that no opportunity of hearing was provided to the petitioner. As such, the impugned order has been passed in violation of principle of natural justice and she further submits that as per sub section (4) of Section 7, the said opportunity of personal hearing was to be given when the authorities contemplates an order adverse to the interest of the assessee.
3. Pooja Banga, learned Standing Counsel for the Revenue is not in a position to show us that any opportunity of hearing was granted to the petitioner. Consequently, the contention of learned counsel for the petitioner is found to be sustainable.
4. The impugned order dated 27.04.2024 is accordingly quashed with liberty to the Department to pass a fresh order after providing proper opportunity of hearing to the petitioner.
5. Pending application, if any, also stands disposed of.
