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

Facts

The petitioner, M/s Shakti Engg. Works, challenged an adjudication order dated 25.02.2025 passed against them, and a consequential appellate order dated 19.03.2026. The respondents are the Union of India and others, including the CBIC and the State of Haryana. The core of the petitioner's grievance, as acknowledged by the Court, was that no opportunity of hearing was provided before the adjudication order was passed. The specific tax period and the amount in dispute are not recorded in the judgment. The procedural history involves the passing of the adjudication order and a subsequent appeal, both of which are now being challenged.

Held

The Court held that the impugned adjudication order dated 25.02.2025 was passed in violation of the principles of natural justice, as no opportunity of hearing was afforded to the petitioner. This contravention also extended to Section 75(4) of the Central Goods and Services Tax Act, 2017. Consequently, the Court found both the adjudication order and the consequential appellate order dated 19.03.2026 to be unsustainable. The reasoning was straightforward: the failure to provide a hearing rendered the orders void. The ratio decidendi is that any order passed against a party without affording them a reasonable opportunity of being heard is bad in law and liable to be set aside. The operative direction was to set aside both the adjudication order and the appellate order. However, the respondents were granted liberty to proceed afresh against the petitioner in accordance with the law, implying they could re-initiate the process after providing the requisite opportunity of hearing.

Key Issues

1. Whether the impugned adjudication order dated 25.02.2025, passed against the petitioner, is violative of the principles of natural justice, specifically the right to a hearing, contrary to Section 75(4) of the Central Goods and Services Tax Act, 2017? The petitioner argued that no opportunity of hearing was granted before the adjudication order was passed, which violates fundamental principles of fairness and statutory provisions. The respondents, represented by Mr. Ajay Kalra, Senior Standing Counsel for CBIC, and Mr. Sourabh Goel, Addl. A.G., Haryana, did not present any arguments against this specific contention as recorded in the judgment. The judgment explicitly states, "It is not disputed that before passing the impugned adjudication order dated 25.02.2025 to the petitioner’s prejudice, no opportunity of hearing was offered to the petitioner."