Vikash Kumar Giri vs. Assistant Commissioner, Bally And Ors.

WPA/18416/2024HC CalcuttaGSTCNR WBCHCA035583202405 September 2024Bench: HON'BLE JUSTICE RAJA BASU CHOWDHURY4 pages

AI SummaryRemanded

Facts

The petitioner, Vikash Kumar Giri, challenged an adjudication order passed under Section 74 of the WBGST/CGST Act, 2017. The order was issued in response to a show cause notice dated March 20, 2024, pertaining to the tax period April 2022 to March 2023. The petitioner contended that upon receiving the show cause notice, he responded and requested a personal hearing, seeking an adjournment of fifteen days. However, the proper officer allegedly disregarded this request, proceeded without affording a personal hearing, and passed the adjudication order. The respondents acknowledged that an adjournment was requested but claimed the grounds were unacceptable, candidly admitting that no personal hearing was granted.

Held

The Court held that the adjudication order dated March 27, 2024, was vitiated and liable to be set aside. The reasoning was based on the violation of the principles of natural justice and the specific provisions of Section 75(4) of the WBGST/CGST Act, 2017. The Court noted that the petitioner had not only applied for a personal hearing but also that the show cause notice itself contemplated an adverse order. Therefore, the proper officer was obliged to afford the petitioner an opportunity of hearing. The Court reasoned that by failing to do so, the order passed was fundamentally flawed. The operative directions included setting aside the impugned order, allowing the petitioner to file his response to the show cause within two weeks from the date of the order, and directing the proper officer to dispose of the proceedings by passing a reasoned order after providing an opportunity of hearing to the petitioner. It was clarified that if the petitioner failed to file his response within the stipulated time, the proper officer could proceed, subject to compliance with Section 74(5) of the Act. No issue was expressly left undecided.

Key Issues

1. Whether the adjudication order passed under Section 74 of the WBGST/CGST Act, 2017, is vitiated due to the denial of a personal hearing to the petitioner, contrary to the principles of natural justice and Section 75(4) of the said Act? Petitioner's Arguments: The petitioner argued that the proper officer erred by disregarding his prayer for an adjournment and a personal hearing. He contended that despite his response to the show cause notice, which included a request for a personal hearing, the proper officer proceeded to pass an order under Section 74 without affording him an opportunity to be heard. This, he argued, violated the principles of natural justice and the provisions of the Act. Revenue's Arguments: The respondents acknowledged the petitioner's application for adjournment but stated that the grounds were not acceptable, leading to its refusal. They candidly admitted that no personal hearing was provided to the petitioner. They did not present arguments against the petitioner's claim of violation of natural justice.

Sections Cited

Section 74, Section 75(4), Section 74(5)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

5th September, 2024 (AK) 109 W.P.A 18416 of 2024 Vikash Kumar Giri Vs. The Assistant Commissioner, Bally and others Mr. Abhijat Das Ms. Aratrika Roy …for the petitioner. Mr. Anirban Ray Md. T.M. Siddiqui Mr. Tanoy Chakraborty Mr. Saptak Sanyal …for the State. 1. Challenging an adjudication order passed under Section 74 of the WBGST/CGST Act, 2017 (hereinafter referred to as ‘the said Act’) the instant writ petition has been filed. 2. Mr. Das, learned Advocate appearing on behalf of the petitioner, by drawing attention of this court to the reply of the show cause notice issued dated 20th March, 2024 in respect of the tax period April 2022 to March 2023 would submit that immediately upon receipt of the show cause the petitioner had responded to the same and had opted for personal hearing. He submits that in his response, he had sought for an adjournment for fifteen days to respond to the show cause. He submits that the proper officer despite receipt of the response filed by the petitioner by disregarding his prayer for 2 adjournment and without affording the petitioner an opportunity of hearing had determined the show cause by passing an order under Section 74 of the said Act. 3. Mr. Sanyal, learned Advocate enters appearance on behalf of the respondents. 4. He acknowledges the fact that an application for adjournment was made. According to him, since the grounds for adjournment were not acceptable adjournment was declined. He, however, candidly acknowledges the fact that no personal hearing was given to the petitioner. 5. Having heard the learned Advocates appearing on behalf of the respective parties and having considered the materials on record, I find that although a show cause was issued calling upon the petitioner to respond by 22nd March, 2024 the said show cause did not provide for date and time of personal hearing. 6. Although in the response filed by the petitioner on 20th March, 2024 the petitioner had not only prayed for an accommodation for fifteen days to give response to the show cause but had also opted for personal hearing, the proper officer by refusing the adjournment had determined the petitioner’s liability without affording the petitioner an opportunity of personal hearing. 3 7. I find that Section 75(4) of the said Act provides for grant of personal hearing when an adverse order is contemplated. 8. In this case not only, did the petitioner apply for personal hearing but the show cause itself contemplated passing of an adverse order against the petitioner. 9. Having regard thereto, in my view, the proper officer was obliged to afford opportunity of hearing to the petitioner, having not done so the order stands vitiated on such ground as also on the ground of violation of principles of natural justice. 10. In view thereof, the order dated 27th March, 2024 is set aside. 11. The petitioner shall be at liberty to file his response to the show cause within a period of two weeks from date. The proper officer shall, upon giving opportunity of hearing to the petitioner dispose of the

proceeding by passing a reasoned order.

12.

It is made clear that if the petitioner for any reason does not file his response to the show cause within the time stipulated herein, it shall be open to the proper officer to proceed subject to compliance of the provisions of Section 74(5) of the said Act.

13.

With the above observations, writ petition stands disposed of.

14.

There shall be no order as to costs.

15.

Urgent Photostat certified copy of this order, if applied for, be made available to the parties upon compliance with the necessary formalities.

(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.