Hotel Rudra And Another vs. Deputy Commissioner, State Tax And Others

WPA/506/2022HC CalcuttaGSTCNR WBCHCA001121202204 July 2025Bench: HON'BLE JUSTICE SMITA DAS DE4 pages

AI SummaryRemanded

Facts

The writ petition was filed by Hotel Rudra & Anr. challenging an order dated 28.09.2021 passed by the Joint Commissioner, State Tax, Baharampur Circle. The petitioner, a hotel business, was subjected to an inspection for the period 2017-18 to 2019-20. During this process, a discrepancy was noted between GST returns and seized documents, leading to a determination of enhanced taxable turnover from Rs.19,33,516/- to Rs.70,03,871/- for April 2019 to February 2020, with tax implications on alleged food, hukka, and banquet services. A show-cause notice was issued, followed by a final order dated 15.12.2020, demanding Rs.10,30,277/- including tax, penalty, and interest. The petitioner appealed this order, which was disposed of ex parte by the appellate authority (respondent No. 2) on 28.09.2021, forming the basis of the present challenge.

Held

The Court held that the matter was disposed of ex parte without considering the merits of the case. For the sake of justice and equity, the Court decided to remand the matter back to the concerned authority for proper adjudication. The Court emphasized that the principles of natural justice require a party to have a fair opportunity to present their case. Consequently, the respondent No. 2 (appellate authority) was directed to fix a date of hearing, provide notice to the petitioner, and pass a reasoned order after affording an opportunity of hearing within 8 weeks. The Court made it clear that if the petitioner failed to appear on the fixed date, the matter would be heard ex parte without further adjournment. The entire exercise was to be completed within the stipulated period.

Key Issues

1. Whether the appellate order dated 28.09.2021, passed ex parte by the Joint Commissioner, State Tax, Baharampur Circle, is liable to be set aside for violating principles of natural justice, as argued by the petitioner? The petitioner contended that the matter was disposed of ex parte by the appellate authority and sought a remand back to the concerned authority for proper adjudication, emphasizing the need for a fair opportunity to present their case. The respondents, represented by the Learned G.P. and A.G.P., argued that the petitioners were provided ample opportunities to appear before the authorities but failed to do so and did not submit any communication explaining their absence.

Sections Cited

Section 73

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

04.07.2025 Sl No.5 Court No.236 (gc) WPA 506 of 2022 Hotel Rudra & Anr. Vs. Deputy Commissioner, State Tax & Ors. Mr. Souradeep Majumdar …for the Petitioners. Mr. Anirban Ray, Ld. G.P., Mr. Md. T.M. Siddiqui, Ld. A.G.P. Mr. Tanoy Chakraborty,, Mr. Saptak Sanyal ..for the State. 1. The instant writ petition has been filed challenging the order dated 28.09.2021 passed by the Joint Commissioner, State Tax, Baharampur Circle. 2. The writ petitioner no.1 is a partnership firm carrying on business under the trade name of M/s. Hotel Rudra, and is duly registered with the GST Authority under the West Bengal Goods & Services Tax Act, 2017. The issue involved in the instant case pertains to enhancement of taxable turnover from Rs.19,33,516/- (Rs.63,92,969-Rs.44,59,453) to Rs.70,03,871/- during the period from April, 2019 to February, 2020, segregating the enhanced turnover under several heads namely; Food of Rs.30,26,256/- Hukka of Rs.9,43,155/- and Banquet of Rs.8,34,460/- whereas the petitioners have only room rent 2 service of Rs.19,33,516/- on which tax is payable. 3. The inspection, search and seizure for the period from 2017-18 to 2019-20 was initiated by the respondent no.1. During the pendency of such proceeding and intimation in Form GST DRC-01A vide Memo No.792/BI-SB dated 18.09.2020 were issued, wherein a difference in turnover in GST returns and the seized documents were pointed out. As a result of which, the turnover for the relevant period from April, 2019 to February, 2020 was determined at Rs.48,03,871/- and was subjected to tax @ 5%, 18% and 28% on the alleged supply of food, hukka and banquet service respectively. 4. Subsequently, the respondent no.1 issued a show-cause notice on 07.10.2020 in Form GST DRC-01 wherein a turnover being different from the earlier GST DRC-01A was determined at Rs.70,03,871/- assessing the tax liability to the tune of Rs.6,75,599/- and the penalty of equal sum along with applicable interest. Consequent thereto a final order was passed vide 15.12.2020 assessing the total tax liability of Rs.4,92,597.36 with penalty of equal sum together with interest of Rs.1,71,081/- being the total demand of Rs.10,30,277/-. 3 5. Against the final order dated 15.12.2020, the writ petitioners filed an appeal before the appellate authority being the respondent No. 2 herein, who disposed of the matter ex parte by an Order dated 28.09.2021 which is the subject matter of challenge in the instant case. 6. The petitioner submits that the matter be remanded back to the concerned authority for proper adjudication since the matter was disposed of ex parte. 7. Per contra, the Learned Counsel for the respondents strenuously argued that the petitioners were already given ample opportunities to appear before the authority concerned but they remained absent and also failed and or neglected to submit any kind of communication to the Department concerned for explaining the reasons for such non- appearance. 8. Having heard the parties and upon considering the materials available on record, I am of the view that since the matter has been disposed of ex parte without considering the merits of the case, and for the sake of interest of justice and equity the matter should be remanded back to the authority concerned for proper adjudication of the same. The principles of natural justice warrants that a party should have a fair 4 opportunity to present his or her case. Hence, the respondent No. 2 is directed to fix a date of hearing peremptorily upon service of notice of hearing to the petitioner and pass a reasoned order after affording an opportunity of hearing within a period of 8 weeks from the date of

communication of the said order. The order shall be communicated accordingly in the approved/prescribed portal mentioned in the statute. It is made clear that the petitioner shall appear on the date fixed for hearing failing which the matter shall be heard ex parte and no further adjournment shall be granted to the petitioner. The entire exercise is to be completed within the stipulated period framed above.

Accordingly, the writ petition is disposed of.

10.

However, there shall be no order as to costs.

11.

Urgent Photostat certified copy of this order if applied for, be supplied to the parties upon compliance of all necessary formalities.

(Smita Das De, J.)

Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.