Raju Sharma vs. Assistant Commissioner Of State Tax, Bureau Of Investigation, South Bengal And Ors

Held

The Court held that the petitioner had made out a prima facie case for interference. It was evident that the petitioner, in their reply to the show cause notice, had specifically requested permission to cross-examine Dipak Kumar Daiya and Barun Kumar Jha. The impugned order was passed without acceding to this request. The Court found that the denial of the opportunity to cross-examine the persons whose statements were relied upon for imposing the penalty constituted a gross violation of the principles of natural justice. In light of the fair submission by the Learned Government Pleader and the noted procedural infirmity, the Court was of the considered view that the matter warranted a remand to the adjudicating authority for fresh consideration. The impugned order dated 19.03.2026, along with consequential notices and orders, was set aside. The matter was remanded to Respondent No. 5 for fresh consideration, with directions to fix a personal hearing, provide relevant documents, and specifically afford the petitioner an opportunity to cross-examine Dipak Kumar Daiya and Barun Kumar Jha, followed by a fresh reply. The respondent was directed to complete the exercise and pass a reasoned order by 31st October, 2026. The Court clarified that it had not expressed any opinion on the merits of the case.

Facts

The petitioner, Raju Sharma, operating as a sole proprietorship under the name "RID", filed a writ petition challenging an order dated 19.03.2026 passed by the Deputy Commissioner of State Tax, Bureau of Investigation. This order imposed a penalty of Rs. 3,70,63,516/- under Section 122(1)(i) and Section 122(1)(vii) of the West Bengal Goods and Services Tax Act, 2017, read with the Central Goods and Services Tax Act, 2017. The penalty was levied for issuing invoices without actual supply of goods or services and for availing Input Tax Credit (ITC) without actual receipt of goods or services. A show cause notice was issued on 25.06.2026. The petitioner replied on 16.02.2026, specifically requesting the cross-examination of two individuals, Dipak Kumar Daiya and Barun Kumar Jha. This request was denied, and the impugned order was passed. A reminder for payment of the penalty was issued on 29.06.2026.

Key Issues

1. Whether the impugned order imposing penalty under Section 122 of the WBGST and CGST Act, 2017, is vitiated by a gross violation of the principles of natural justice due to the denial of the petitioner's request for cross-examination of key witnesses? The petitioner argued that the order was passed arbitrarily without considering their specific request for cross-examination of Dipak Kumar Daiya and Barun Kumar Jha, whose statements formed the basis of the allegations. This denial, according to the petitioner, constituted a gross violation of natural justice and a lack of reasonable opportunity of being heard. They prayed for the matter to be remanded for fresh consideration after providing the opportunity for cross-examination. The State-respondents, through the Learned Government Pleader, fairly conceded that there was a violation of the principles of natural justice in the present case. They did not oppose the prayer for remanding the matter for fresh consideration, subject to the petitioner's cooperation with the proceedings.