Vishnu Engineering Corporation vs. Deputy Commissioner And Another

WPA/1546/2022HC CalcuttaGSTCNR WBCHCA003356202230 June 2026Bench: HON'BLE JUSTICE RAJA BASU CHOWDHURY4 pages

AI SummaryRemanded

Facts

The petitioner, Vishnu Engineering Corporation, filed a writ petition challenging an order dated June 5, 2022, passed under Section 74(10) of the WBGST/CGST Act, 2017, for the tax period of April 2018 to June 2018. The petitioner contended that while a show cause notice (DRC 01) was issued, preceded by a pre-show cause notice (DRC 01A), the show cause notice dated December 21, 2020, did not specify a date for a personal hearing. The High Court initially granted a status quo order on the adjudication order dated January 5, 2022, which was subsequently extended. The respondents, including the State and CGST authorities, argued that the petitioner was duly given an opportunity of hearing through the show cause notice and had responded to it, and that the proper officer considered the response before passing the order.

Held

The Court held that the adjudication order dated June 5, 2022, could not be sustained. The Court found that the show cause notice did not indicate a date for personal hearing, and despite an adverse order being contemplated against the petitioner, an opportunity of hearing was not provided. This was deemed a violation of Section 75(4) of the Act, which mandates an opportunity of hearing when an adverse decision is contemplated or a written request is received. Consequently, the Court set aside the impugned order. The matter was remanded back to the proper officer for re-adjudication on merits after providing an opportunity of hearing to the petitioner. The proper officer was directed to issue a fresh notice on the common portal within one month, specifying the date for personal hearing, and to conclude the proceedings within a further period of one month thereafter. The period from January 5, 2022, to the disposal of the writ petition was excluded for calculating the time for completion of proceedings.

Key Issues

1. Whether the adjudication order dated June 5, 2022, passed under Section 74(10) of the WBGST/CGST Act, 2017, is sustainable in law, given that the show cause notice dated December 21, 2020, did not specify a date for personal hearing, thereby violating the principles of natural justice and Section 75(4) of the Act. Petitioner's arguments: The petitioner argued that the show cause notice failed to provide a date for personal hearing, which is a mandatory requirement when an adverse order is contemplated, as stipulated by Section 75(4) of the Act. This omission renders the subsequent adjudication order invalid. Revenue/State's arguments: The respondents contended that the petitioner was adequately provided with an opportunity of hearing through the show cause notice, to which they had responded. They asserted that the proper officer duly considered the petitioner's response before passing the order, and no irregularity occurred in the proceedings.

Sections Cited

Section 74(10), Section 75(4)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

30.06.2026 sayandeep Sl. No. 01 Ct. No. 03 WPA 1546 of 2022 Vishnu Engineering Corporation Vs. Deputy Commissioner, Officer of the Joint Commissioner, Chandni Chowk Charge & anr. Mr. Rishabh Karnani Ms. Mou Saha …. for the petitioner Mr. Tapan Bhanja ….. for the UOI Ms. Manasi Mukherjee Mr. Bijitesh Mukherjee ….. for the CGST Ms. Manju Agarwal, Sr. Adv. Mr. Ram Chandra Agarwal …..for the State 1. Although the matter has come up under the heading “Extension of Interim Order”, however, having regard to the fact that the matter is pending since 2022 instead of extending the interim order, by consent of the parties, the matter is taken up for consideration for final disposal. 2. Challenging the order dated 5th June, 2022 passed under the provisions of Section 74 (10) of the WBGST/CGST Act, 2017 (hereinafter referred to as the said Act) for the tax period of April, 2018 to June, 2018, the instant writ petition has been filed. According to the petitioner, though a show cause notice was issued to the petitioner in form DRC 01 which WPA 1546 of 2022 2 was preceded by a pre-show cause notice in form DRC 01A, however, the show cause notice dated 21st December, 2020 did not provide for a date when the petitioner would be offered opportunity of personal hearing. When the writ petition was initially moved, the same was entertained by an order dated 28th February, 2022 and an order of status quo was passed with regard to the adjudication order dated 5th January, 2022 till 28th March, 2022. Such interim order has subsequently been extended from time to time and/or reimposed and is still subsisting. 3. Ms. Agarwal, learned senior advocate appears for the WBGST. While Ms. Mukherjee, learned advocate appears for the CGST authorities. Ms. Agarwal, learned senior advocate while drawing attention of this Court to the affidavit-in- opposition filed by the respondent No. 1 would submit that in the instant case the petitioner was duly given opportunity of hearing in the form of show cause, the petitioner had also responded to the show cause. The proper officer had duly considered the show cause filed by the petitioner and thereafter had passed the order. There is no irregularity in the same. WPA 1546 of 2022 3 4. Having heard the learned advocates appearing for the respective parties it appears from the show cause that the show cause did not indicate the date when the petitioner would be afforded with opportunity of hearing. Though in instant case, an adverse

order was contemplated against the petitioner as is apparent from the show cause notice and the subsequent order passed by the respondents opportunity of hearing was not provided. I find that as rightly argued by the learned advocate for the petitioner Section 75(4) of the said Act, inter alia, provides that where a request is received in writing from the person chargable with tax or penalty or where an adverse decision is contemplated against such person an opportunity of hearing has to be given.

Having regard to the specific provisions contained in the statute and the violation thereof, I am of the view that the order passed by the proper officer cannot be sustained. Accordingly, the same is set aside.

The matter is remanded back to the proper officer for a re-adjudication on merits upon giving an opportunity of hearing to the petitioner. The proper officer is directed to conclude the proceedings by uploading a fresh notice on the common portal within a period of WPA 1546 of 2022

one month from the date of communication of this order intimating the petitioner the date when personal hearing shall be offered, and the proceedings must be completed within a further period of one month thereafter. Since the petitioner has approached this Court challenging the order dated 5th June, 2022, and the writ petition was pending before this Court since 25th January, 2022, I am of the view that the entire period between 5th January, 2022 and the disposal of the writ petition shall stand excluded and the proper officer shall have time to complete the proceedings within the period as indicated hereinabove.

With the above observations and directions, the writ petition is disposed of.

(Raja Basu Chowdhury, J.)

Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.