Bidyut Distributers vs. State Of West Bengal And Ors.

Held

The Court held that the adjudication order dated July 20, 2020, was liable to be set aside due to a clear violation of the principles of natural justice. The reasoning was that the hearing date fixed by the Adjudicating Officer was erroneously scheduled prior to the deadline for the petitioners to submit their reply to the show-cause notice. This procedural flaw prevented the petitioners from adequately presenting their case before the order was passed. The Court explicitly stated that it had not examined the merits of the assessment order itself. The ratio decidendi is that a hearing must be scheduled after, or at least concurrently with, the opportunity to reply to a show-cause notice to ensure compliance with natural justice. The impugned adjudication order was set aside, and the respondents were directed to pass a fresh speaking order after providing the petitioners with a proper opportunity of hearing within two months from the communication of the order.

Facts

The petitioners, Bidyut Distributors & Anr., challenged an adjudication order dated July 20, 2020, passed under Section 74 of the State GST Act. The challenge was based on the violation of principles of natural justice and jurisdictional grounds. The petitioners contended that a show-cause notice dated February 11, 2020, required them to reply by March 12, 2020, but the date fixed for hearing was February 25, 2020, which was prior to the deadline for submitting their reply. The respondents, representing the State of West Bengal, were unable to contradict these facts, which were substantiated by the record.

Key Issues

1. Whether the adjudication order dated July 20, 2020, passed under Section 74 of the State GST Act is liable to be set aside on the ground of violation of the principles of natural justice? Petitioner's Argument: The petitioners argued that the principles of natural justice were violated because the date fixed for hearing (February 25, 2020) was before the last date given for submitting their reply to the show-cause notice (March 12, 2020). This procedural irregularity rendered the subsequent adjudication order invalid. Revenue's Argument: The learned Advocate for the respondents was not in a position to contradict the allegations made by the petitioners regarding the dates mentioned in the show-cause notice and the hearing, which were substantiated by the record.