Ms Shakti Engg Works vs. Union Of INDIA, Through Secretary

Facts

The petitioner, M/s Shakti Engg. Works, challenged an adjudication order dated 18.12.2024 and a consequential appellate order dated 19.03.2026. The core of the dispute revolves around the procedural fairness of the adjudication process. It is undisputed that before the impugned adjudication order was passed to the petitioner's prejudice, no opportunity of hearing was provided to the petitioner. This lack of hearing formed the basis of the petitioner's challenge before the High Court.

Held

The Court held that the impugned adjudication order dated 18.12.2024 was not only violative of the principles of natural justice but also contravened Section 75(4) of the Central Goods and Services Tax Act, 2017. The reasoning was based on the undisputed fact that no opportunity of hearing was granted to the petitioner before the order was passed. Consequently, both the impugned adjudication order dated 18.12.2024 and the consequential appellate order dated 19.03.2026 were set aside. The Court, however, granted liberty to the respondents to proceed afresh against the petitioner in accordance with law. The ratio decidendi is that an order passed in violation of the principles of natural justice, particularly the right to be heard, is unsustainable and liable to be quashed.

Key Issues

1. Whether the impugned adjudication order dated 18.12.2024 is violative of the principles of natural justice, specifically the right to a fair hearing, as contemplated under the Central Goods and Services Tax Act, 2017? Petitioner's contention: The petitioner argued that the adjudication order was passed without affording them an opportunity of hearing, which is a fundamental breach of natural justice principles and statutory provisions. They contended that this procedural lapse vitiates the order. Revenue's contention: The respondents (Union of India and others) did not dispute the fact that no opportunity of hearing was provided to the petitioner before passing the adjudication order. Their argument, if any, was implicitly conceded by this admission.