Sarabindu Chatterjee vs. Assistant Commissioner Of Rvenue State Tax Serampore Charge Gov Of W B And Ors
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The appellant, Sarabindu Chatterjee, was the unsuccessful writ petitioner before the learned Single Bench. The appellant challenged an order passed under Section 73 of the CGST/WBGST Act, 2017, which directed payment of tax, interest, and penalty. The learned Single Bench had noted that approximately 10% of the disputed tax had already been recovered and relegated the appellant to the statutory appellate remedy, directing credit for the recovered amount. The present appeal arises from this decision. The appellant's primary contention is that the adjudication order dated December 5, 2023, was passed without granting an opportunity for a personal hearing, despite Section 75(4) of the Act mandating such an opportunity when an adverse decision is contemplated.
Held
The Court held that the adjudication order dated December 5, 2023, was passed in violation of Section 75(4) of the CGST/WBGST Act, 2017. This section mandates that an opportunity of personal hearing must be granted before passing any adverse decision against a person chargeable with tax and penalty, irrespective of whether a written request for such a hearing was made. The Court acknowledged that the appellant had not submitted replies or requested a personal hearing. However, it emphasized that the statutory provision requires the authority to grant a personal hearing if an adverse order is contemplated. Considering that approximately 10% of the disputed tax had already been recovered, protecting the department's interest to that extent, the Court decided to set aside the adjudication order and remand the matter back to the Adjudicating Authority. The appellant is to treat the impugned order as a show cause notice and submit a reply within two weeks. The Adjudicating Authority will then fix a date for personal hearing and pass a fresh adjudication order on merit. The Court also clarified that the de novo assessment would not be time-barred due to this remand.
Key Issues
1. Whether the adjudication order dated December 5, 2023, passed under Section 73 of the CGST/WBGST Act, 2017, is liable to be set aside for violation of the principles of natural justice, specifically the requirement of a personal hearing as stipulated in Section 75(4) of the Act, even in the absence of a specific request from the taxpayer? Petitioner's Arguments: The appellant argued that the adjudication order was passed without affording a personal hearing, which is a mandatory requirement under Section 75(4) of the Act when an adverse decision is contemplated. They contended that this provision applies even if no written request for a personal hearing was made by the taxpayer. Revenue's Arguments: The revenue did not explicitly argue against the requirement of a personal hearing. The judgment notes that the appellant did not reply to the discrepancy notice, show cause notice, or make any written representation for a personal hearing. However, the Court found that despite these omissions, the mandate of Section 75(4) was not fulfilled.
Sections Cited
Section 73, Section 75(4)
AI-generated summary — verify with the full judgment below
2025 Item No.03 Ct. No. 1 RP MAT 223 of 2025 + Serampore Charge & Ors. Mr. Sandip Choraria Mr. Somnath Roychowdhury Ms. Sanjana Jha Mr. Akash Chakraborty ….For Appellant Mr. Tanoy Chakraborty Mr. Saptak Sanyal ….For State
The appellant is the unsuccessful writ petitioner. Having failed in challenging the order passed under Section 73 of CGST/WBGST Act 2017 and directing the appellant to pay the tax along with interest and penalty, the learned Single Bench noted that roughly 10% of the disputed tax has already been recovered from the appellant and that an alternative remedy is available under the Act and relegated the appellant to avail the statutory appellate remedy with further direction to the respondent authority to give credit to the amount which was recovered from the appellant in lieu of pre-deposit.
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After elaborately hearing the learned advocate for the appellant and the learned government counsel we find that the adjudication order dated 5th December, 2023 has been passed without granting an opportunity of personal hearing to the appellant. It is no doubt true that the appellant did not reply to the discrepancy notice nor submitted any reply to the show cause notice nor there was any written representation made by the appellant to afford an opportunity of personal hearing. However, Sub- Section 4 of Section 75 of the Act states that where any adverse decision is contemplated against a person chargeable with tax and penalty, an opportunity of personal hearing shall be granted. Thus, even without a written request, if any order adverse to the interest of the taxpayer is passed, an opportunity of personal hearing has to be afforded.
Considering the peculiar facts and circumstances of the case and the fact that since already roughly 10% of the disputed tax has been recovered by the department, the interest of the department stands protected to the said extent and the matter can be set back to the Adjudicating Authority, namely, Assistant Commissioner of Revenue, State Tax, Serampore Charge, Government of West Bengal for 3 a fresh decision. Accordingly, the appeal and the connected applications are disposed of by directing the appellant to treat the order of adjudication dated 5th December, 2023 as show cause notice and submit his reply within two weeks from the date of receipt of the server copy of this order along with all documents and details which he proposes to rely upon and on receipt of such reply the Adjudicating Authority shall fix a date of personal hearing on which date the appellant himself or his authorized representative shall appear and put forth his submission and documents, if any, and after which a fresh order of adjudication be passed on merit and in accordance with law.
We make it clear that the appellant will not be entitled to raise the plea that the de novo assessment, which has been directed to be done, is time barred since the matter has been remanded by the Court for fresh decision.
Urgent Photostat copy of this order, if applied for by the learned advocates for the parties, be delivered to the learned advocates for the parties, upon compliance of all formalities. [T.S. SIVAGNANAM] CHIEF JUSTICE [CHAITALI CHATTERJEE (DAS), J.]
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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.