Soumyendu Bikash Jana vs. Union Of INDIA And Ors.

Held

The Court held that the proper officer is statutorily bound to afford an opportunity of hearing to the person chargeable with tax or penalty, either upon receiving a written request or when an adverse decision is contemplated. The Court found that the impugned order dated December 29, 2023, passed by the proper officer for the period 2017-2018, was not sustainable because no opportunity of hearing was granted to the petitioner, violating the mandate of Section 75(4) of the CGST Act, 2017. The reasoning was based on the interpretation of Section 75(4) and the precedents cited by the petitioner. The ratio decidendi is that a statutory mandate for personal hearing, when an adverse decision is contemplated, cannot be violated, and any order passed in contravention thereof is liable to be quashed. The Court quashed the impugned order and remanded the matter to the concerned authority to pass a fresh order in accordance with law after affording a reasonable opportunity of hearing to the petitioner. No issue was expressly left undecided.

Facts

The petitioner, Soumyendu Bikash Jana, is challenging an adjudication order dated December 29, 2023, passed by respondent no. 4. This order pertains to the financial year 2017-2018. The petitioner contends that a summary of show cause notice in FORM GST DRC-01, issued on September 7, 2023, by respondent no. 4, had 'N.A.' in the personal hearing column, indicating no opportunity for a hearing was granted. The petitioner argues that granting a personal hearing is mandatory before adjudication. The adjudication order was passed without providing such an opportunity, which the petitioner claims violates statutory provisions.

Key Issues

1. Whether the adjudication order dated December 29, 2023, passed by respondent no. 4 for the financial year 2017-2018 is sustainable in law, given that no opportunity of personal hearing was granted to the petitioner, despite an adverse decision being contemplated, as required by Section 75(4) of the CGST Act, 2017? The petitioner argued that Section 75(4) of the CGST Act, 2017, mandates an opportunity of hearing when an adverse decision is contemplated against a person. The petitioner cited the Division Bench judgment of their High Court in "Goutam Bhowmik vs. State of West Bengal" and the Allahabad High Court's decision in "Bharat Mint and Allied Chemicals v. Commissioner of Commercial-tax" to support the contention that the absence of a personal hearing renders the adjudication order invalid. The revenue or State did not record any arguments in the judgment.