Essaar Coatings And Another vs. State Of Punjab And Others

Facts

The petitioner, Essaar Coatings India Limited, a MSME unit, filed a writ petition seeking to quash letters/orders dated December 30, 2025 (Annexure P-15) and January 5, 2026 (Annexure P-17). These orders withdrew the benefit of exemption from electricity duty and GST, which had previously been extended to the petitioner via a letter dated March 10, 2023. The petitioner contended that this withdrawal was done without providing an opportunity of hearing, violating the principles of natural justice. The State, through the Assistant Director, Department of Industries and Commerce, submitted that it had been decided to grant the petitioners a due opportunity of hearing and to take appropriate action thereafter.

Held

The Court held that the impugned orders/letters dated December 30, 2025, and January 5, 2026, were unsustainable as they were passed without affording the petitioner an opportunity of hearing, thus violating the principles of natural justice. The Court noted the submission by the State counsel that a decision had been taken to grant the petitioner a due opportunity of hearing. Consequently, the Court set aside the impugned orders and granted liberty to the respondents to pass fresh orders after providing the petitioner with an opportunity of hearing and considering their response. No specific GST Act or Rules were discussed in detail, but the core issue revolved around procedural fairness in administrative action.

Key Issues

1. Whether the withdrawal of exemption from electricity duty and GST, vide letters dated December 30, 2025, and January 5, 2026, without affording an opportunity of hearing to the petitioner, is violative of the principles of natural justice, thereby rendering the action unsustainable in law? Petitioner's Contention: The petitioner argued that the impugned orders withdrawing the previously granted exemption from electricity duty and GST were passed without providing them with any opportunity of hearing. This action, they contended, was a direct violation of the principles of natural justice and therefore legally unsustainable. Revenue/State's Contention: The State counsel, on instructions, submitted that it has been decided to afford the petitioners a due opportunity of hearing and to take appropriate action in accordance with law, keeping in view the applicable policy.