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

Facts

The petitioner, M/s Shakti Engg. Works, challenged an adjudication order dated 24.04.2025 and a consequential appellate order dated 19.03.2026. The core of the petitioner's grievance was that no opportunity of hearing was provided before the adjudication order was passed. The respondents were the Union of India and others, including the CBIC and the State of Haryana. The judgment does not specify the tax period or the amount in dispute. The procedural history leading to the adjudication order is not detailed, other than the fact that the impugned orders were passed to the petitioner's prejudice.

Held

The Court held that the impugned adjudication order dated 24.04.2025 was passed in violation of the principles of natural justice and contravened Section 75(4) of the Central Goods and Services Tax Act, 2017, because no opportunity of hearing was granted to the petitioner. Consequently, the Court found that the consequential appellate order dated 19.03.2026 was also vitiated. The ratio decidendi is that adherence to principles of natural justice, specifically the right to be heard, is mandatory before passing any adverse order under the GST Act. The Court set aside both the impugned adjudication order and the consequential appellate order. However, the respondents were granted liberty to proceed afresh against the petitioner in accordance with the law. No other issues were expressly left undecided.

Key Issues

1. Whether the impugned adjudication order dated 24.04.2025, passed to the prejudice of the petitioner, is violative of the principles of natural justice and Section 75(4) of the Central Goods and Services Tax Act, 2017, for not providing an opportunity of hearing? Petitioner's Contention: The petitioner argued that the adjudication order was passed without affording them a hearing, which violates fundamental principles of natural justice and statutory provisions. They relied on the principle that a party must be heard before an adverse order is passed against them. Revenue's Contention: The judgment records no specific argument from the respondents regarding the opportunity of hearing. However, their presence and representation indicate they were defending the impugned orders.