Sabyasachi Calcutta LLP vs. Assistant Commissioner, Ward 206, Zone 11,Delhi And Ors

Facts

The petitioner, Sabyasachi Calcutta LLP, filed a writ petition challenging an order dated April 20, 2024, passed under Section 73 of the CGST Act/DGST Act for the tax period April 2018 to March 2019. This order confirmed a demand of ₹10,23,20,333/-, including interest and penalty, pursuant to a Show Cause Notice dated December 9, 2023. The petitioner had submitted replies to the SCN and was offered a hearing. However, the officer who passed the impugned order (respondent no. 2) had not personally heard the petitioner; the hearing was conducted by a different officer.

Held

The Court held that the petitioner's contention regarding the lack of personal hearing by the adjudicating authority is merited. The Court reasoned that it is a fundamental principle of natural justice that the authority passing an order must be the one that hears the parties. The impugned order dated April 20, 2024, was therefore set aside. The matter was remanded to the adjudicating authority to reconsider the case afresh. The adjudicating authority was directed to afford the petitioner an opportunity of hearing before passing a fresh order. The Court explicitly stated that the petition is allowed in these terms.

Key Issues

1. Whether the impugned order dated April 20, 2024, passed under Section 73 of the CGST Act/DGST Act is vitiated due to the adjudicating authority not personally hearing the petitioner, despite a hearing being afforded by another officer? Petitioner's contention: The petitioner argued that the impugned order has been passed without affording them a proper hearing, as the officer who passed the order was not the one who conducted the hearing. This violates principles of natural justice. Revenue's contention: The judgment records no specific argument from the respondents on this issue.