Raju Sharma vs. Assistant Commissiner 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 from the record that the petitioner had specifically requested to cross-examine Dipak Kumar Daiya and Barun Kumar Jha in their reply to the show cause notice, but this request was not acceded to before passing the impugned order. The denial of the opportunity to cross-examine the persons whose statements were relied upon for imposing the penalty was considered a gross violation of the principles of natural justice. In light of the fair submission by the Learned Government Pleader and the procedural infirmity noted, the Court was of the considered view that the matter warranted a remand to the adjudicating authority for fresh consideration. The impugned order dated March 19, 2026, along with all consequential notices and orders, was set aside. The matter was remanded to Respondent No. 5 for fresh consideration, with directions to fix a date for 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 September 30, 2026. The Court clarified that it had not expressed any opinion on the merits of the case.

Facts

The petitioner, Raju Sharma, operating a sole proprietorship concern named "RID", filed a writ petition challenging an order dated March 19, 2026, passed by the Deputy Commissioner of State Tax, Bureau of Investigation. This order imposed a total penalty of Rs. 5,21,12,208/- under Section 122(1)(i) and Section 122(1)(vii) of the West Bengal Goods and Services Tax Act, 2017, and the Central Goods and Services Tax Act, 2017. The penalty was levied on grounds of issuing invoices without actual supply of goods or services and availing Input Tax Credit (ITC) without actual receipt of goods or services. The petitioner had responded to the show cause notice dated June 25, 2026, by requesting a personal hearing and the opportunity to cross-examine two individuals, Dipak Kumar Daiya and Barun Kumar Jha, whose statements formed the basis of the allegations. This request was denied, and the impugned order was passed.

Key Issues

1. Whether the impugned order dated March 19, 2026, imposing penalty under Section 122 of the WBGST and CGST Act, 2017, is vitiated by a gross violation of the principles of natural justice for denying the petitioner an opportunity to cross-examine Dipak Kumar Daiya and Barun Kumar Jha, whose statements were relied upon by the revenue? Petitioner's Arguments: The petitioner argued that the denial of the request for cross-examination of Dipak Kumar Daiya and Barun Kumar Jha, without considering their statements, constituted a gross violation of natural justice and a reasonable opportunity of being heard. They contended that the impugned order was passed arbitrarily and prayed for the matter to be remanded back to the adjudicating authority for fresh consideration after providing the opportunity for cross-examination. Revenue's Arguments: The Learned Government Pleader for the State respondents fairly submitted that there had been a violation of the principles of natural justice in the present case and did not oppose the prayer for remanding the matter for fresh consideration, subject to the petitioner's cooperation.