Cipla Health Limited vs. Government Of Nct Of Delhi & Anr.

Facts

The petitioner, Cipla Health Limited, filed a writ petition challenging four adjudication orders dated July 16, 2021, and four show-cause notices dated February 15, 2021. These orders and notices were issued by respondent no. 2 under Section 74 of the Delhi Goods and Services Tax Act, 2017, read with the Central Goods and Services Tax Act, 2017. The core of the dispute revolved around the procedural fairness in the issuance of these notices and orders. The petitioner contended that no personal hearing was granted before the adjudication orders were passed, and the show-cause notices lacked precision regarding the proposed action.

Held

The Court held that the impugned adjudication orders dated July 16, 2021, and the show-cause notices dated February 15, 2021, were liable to be set aside. The primary reasoning was the admission by the respondents' counsel that no personal hearing was granted to the petitioner prior to the passing of the adjudication orders. Furthermore, the respondents conceded that the show-cause notices were not precise in articulating the proposed action against the petitioner. The Court accepted the respondents' submission that these notices and orders could be set aside. The ratio decidendi is that adherence to principles of natural justice, including the right to a personal hearing and clarity in show-cause notices, is mandatory under Section 74 of the GST Acts. The Court set aside the impugned orders and notices. Liberty was granted to the respondents to issue fresh show-cause notices in accordance with the law. No issue was expressly left undecided.

Key Issues

1. Whether the adjudication orders passed by respondent no. 2, dated July 16, 2021, are liable to be set aside on the ground that no personal hearing was granted to the petitioner prior to their passing, as contemplated under Section 74 of the Delhi Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017? 2. Whether the show-cause notices dated February 15, 2021, issued by respondent no. 2, are liable to be set aside for being imprecise in articulating the proposed action against the petitioner, thereby violating principles of natural justice? Petitioner's Arguments: The petitioner argued that the adjudication orders were passed without affording them a personal hearing, which is a mandatory procedural requirement. They also contended that the show-cause notices were vague and did not clearly specify the grounds for proposed action, rendering them non-compliant with legal requirements. Revenue's Arguments: The respondents, through their counsel, conceded that no personal hearing was granted to the petitioner before the impugned orders were passed. They also acknowledged that the show-cause notices were not precise in articulating the proposed action. Based on these admissions, the respondents agreed that the show-cause notices and the adjudication orders could be set aside, with liberty to issue fresh notices.