N.C. Paul And Co. vs. State Of West Bengal And Ors.
Original PDF →Facts
The petitioner, N.C. Paul & Co., filed a writ petition challenging an order dated April 29, 2024, passed by the proper officer under Section 73 of the WBGST/CGST Act, 2017, for the tax period April 2018 to March 2019. The petitioner contended that a personal hearing was not afforded before the adverse order was passed. Furthermore, the petitioner argued that the figures in the show-cause notice and the final order under Section 73 varied, with the determination made in the order exceeding the demand raised in the show-cause notice. The State acknowledged the lack of personal hearing.
Held
The Court held that the order dated April 29, 2024, passed under Section 73 of the WBGST/CGST Act, 2017, could not be sustained. Firstly, it was found to be in violation of Section 75(4) of the Act, as an opportunity of personal hearing was not provided to the petitioner when an adverse order was contemplated. Secondly, the Court noted that the determination made in the order was beyond the demand specified in the show-cause notice, which is violative of Section 75(7) of the Act. To rectify these procedural lapses, the Court directed that the order dated April 29, 2024, be treated as a show-cause notice. The petitioner was granted three weeks to respond to this notice. Subsequently, the proper officer was directed to provide a personal hearing to the petitioner and dispose of the matter within four weeks of receiving the response, or if no response was filed. The Court emphasized that no further opportunity to file a response would be given if the petitioner failed to respond within the stipulated period.
Key Issues
1. Whether the order dated April 29, 2024, passed under Section 73 of the WBGST/CGST Act, 2017, is sustainable in light of the admitted lack of personal hearing afforded to the petitioner, in violation of Section 75(4) of the said Act? 2. Whether the determination made in the order dated April 29, 2024, which allegedly exceeds the demand raised in the show-cause notice dated December 27, 2023, is violative of Section 75(7) of the WBGST/CGST Act, 2017? Petitioner's arguments: The petitioner argued that the order was bad in law as no personal hearing was granted, despite the show-cause notice contemplating an adverse order, contravening Section 75(4). They also contended that the final demand exceeded the scope of the show-cause notice, violating Section 75(7). State's arguments: The State conceded that a personal hearing was not afforded to the petitioner. They also acknowledged the discrepancy in figures between the show-cause notice and the final order.
Sections Cited
Section 73, Section 75(4), Section 75(7)
AI-generated summary — verify with the full judgment below
2025 Item No. AD 5 Saswata N.C.Paul & Co. Versus State of West Bengal & Ors. Mr. Abhratosh Majumdar, Sr. Adv. Mr. Sayan Sinha Mr. Kausheyo Roy …For the petitioner Mr. Amitabrata Roy, Ld. GP Mr. Nilotpal Chatterjee Mr. Tanoy Chakraborty Mr. S.Sanyal …For the State
Challenging, inter alia, the order dated 29th April 2024 passed by the proper officer under Section 73 of the WBGST /CGST Act, 2017 (hereinafter referred to as the “said Act”) for the tax period April 2018 to March 2019, the instant writ petition has been filed.
Having heard the learned advocates appearing for the respective parties and since it is admitted by Mr. Sanyal, learned advocate appearing for the State that in the instant case personal hearing was not afforded to the petitioner, I am of the view that having regard to the provisions contained in Section 75(4) of the said Act which requires an opportunity of personal hearing to be given in case an adverse order is contemplated, and since the show-cause dated 27th December, 2023 which contemplated an adverse order was decided without giving an 2WPA 19175 of 2024 opportunity of hearing to the petitioner, the above order dated 29th April, 2024 cannot be sustained.
However, at the same time also noting from the submission made by Mr. Majumdar, learned Senior Advocate appearing for the petitioner that the figures indicated in the show cause notice and the order passed under Section 73 of the said Act are at variance which is also acknowledged by Mr. Sanyal, I have scrutinised the same and find that the determination made is beyond the demand made in the show-cause. Since, the above appears to be violative of Section 75(7) of the said Act, I am of the view that it shall be prudent at this stage to direct the order dated 29th April, 2024 passed under Section 73 of the said Act to be treated as a show cause notice for the petitioner to respond to the same.
The petitioner shall be entitled to respond to the order dated 29th April, 2024 by treating the same as a show-cause notice within a period of 3 weeks from date.
In the event, the petitioner responds to the show cause within the aforesaid period, or in the alternative does not respond to the show-cause, the proper officer, upon giving an opportunity of personal hearing to petitioner, shall hear out and dispose of the aforesaid matter within a period of 4 weeks thereafter.
It is made clear that if the petitioner does not respond to the show cause within the aforesaid period, no further opportunity of filing the response would be required to be given to the petitioner and in such case, the proper officer shall be obliged to decide the same in accordance with law within the aforesaid period.
With the above direction and observation, the writ petition is disposed of.
All parties shall act on the basis of the server copy of this order duly downloaded from this Court’s official website. (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.