Howrah Chemical And Solvent vs. The Joint Commissioner Of Commercial Taxes Shibpur Charge And Ors
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The petitioner, Howrah Chemical & Solvent, filed a writ petition challenging an order dated January 20, 2025, passed under Section 73 of the CGST/WBGST Act, 2017. This order pertained to the tax period April 2020 to March 2021. The petitioner contended that a show cause notice was issued on October 22, 2024, and they subsequently requested a 20-day adjournment on November 21, 2024, to allow for a personal hearing. However, the proper officer allegedly decided the show cause notice ex parte without granting the requested adjournment or a personal hearing, violating statutory provisions and principles of natural justice.
Held
The Court held that the order passed by the proper officer dated January 20, 2025, was contrary to the statute and in violation of the principles of natural justice. Specifically, the Court found that the proper officer failed to grant the petitioner an opportunity of personal hearing, despite a request for adjournment, which is enabled by Section 75(5) of the CGST/WBGST Act, 2017. Consequently, the order was set aside. The Court directed the matter to be remanded back to the proper officer for fresh adjudication on merits. The petitioner was granted liberty to file a response to the show cause notice within 10 days from the date of the order. All consequential steps taken by the respondents, including recovery proceedings, were quashed, and any amount recovered from the petitioner's credit ledger was to be reversed and re-credited. The proper officer was directed to conclude the proceedings expeditiously, not later than four weeks from the date of filing the response or communication of the order, whichever is later.
Key Issues
1. Whether the order passed under Section 73 of the CGST/WBGST Act, 2017, dated January 20, 2025, is liable to be set aside for violation of Section 75(5) of the said Act and principles of natural justice. The petitioner argued that the proper officer erred by passing an ex parte order without granting the requested adjournment and opportunity for a personal hearing, as mandated by Section 75(5) of the CGST/WBGST Act, 2017. They contended that the order was passed de hors the statutory provisions and in violation of natural justice principles. The State, represented by the learned advocates, did not record any specific arguments against the petitioner's contentions regarding the procedural lapses.
Sections Cited
Section 73, Section 75(5)
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2025 Item No AD 9 Saswata
WPA 10784 of 2025 Howrah Chemical & Solvent versus The Joint Commissioner, Commercial Taxes, Shibpur Charge & Ors. Mr. Avra Mazumder Mr. Suman Bhowmick Ms. A. Das Mr. Samrat das Ms. Elina dey Mr. Siddhartha Das Mr. S.N.Banerjee …For the petitioner Mr. A.Ray, Ld. GP Mr. Md. T.M.Siddqui, Ld. AGP Mr. T.Chakraborty Mr. Saptak Sanyal Mr. D. Sahu …For the State
Challenging the order passed under Section 73 of the CGST /WBGST Act, 2017 (hereinafter referred to as the “said Act”) dated 20th January 2025 in respect of the tax period April 2020 to March 2021, the instant writ petition has been filed.
It is the petitioner’s case that a show cause notice was issued on 22nd October 2024 under Section 73 of the said Act for the tax period April 2020 to March 2021 and though, the petitioner had, on 21st November 2024, sought for an adjournment for 20 days with a request to afford the petitioner an opportunity of personal hearing, the proper officer had decided the show cause notice ex parte by order dated 20th January 2025 without acceding to the petitioner’s request for adjournment and without affording the petitioner an opportunity of personal hearing.
Prima facie it would transpire that the aforesaid order has been passed de hors the provisions contained in Section 75(5) of the said Act. Admittedly, the show cause notice contemplates passing of an adverse order and having regard thereto, an opportunity of personal hearing ought to have been granted prior to taking a decision. In the instant
2 case, the petitioner had sought for an adjournment of 20 days. The proper officer without considering the same had passed an order. The aforesaid is also de hors the provisions contained in Section 75(5) of the said Act which enables the petitioner to seek for an adjournment upon showing sufficient cause.
Having heard the learned advocates appearing for the respective parties and considering the materials on record, I am of the view that the aforesaid order which is contrary to the statute also appears to have been passed in violation of principles of natural justice. The same is accordingly set aside and the matter is remanded back to the proper officer for fresh adjudication on merits upon giving an opportunity of hearing to the petitioner.
If the petitioner has, till date, not filed any response to the show cause, the petitioner shall be at liberty to file the same within 10 days from date.
The aforesaid direction for filing of response is peremptory. All consequential steps taken by the respondents including initiation of recovery proceedings stand quashed. If any amount has been recovered from the petitioner’s credit ledger, the same shall be reversed and re- credited to the petitioner’s credit ledger on or before the matter is taken up for final hearing by the proper officer.
Needless to note that the proper officer shall conclude the proceedings as expeditiously as possible not later than 4 weeks from the date of filing the response by the petitioner or with 4 weeks from the date of communication of this order whichever is later.
3
With the above observations and directions, the writ petition stands disposed of.
All parties shall act on the basis of 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.