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

WPA/504/2022HC CalcuttaGSTCNR WBCHCA001116202204 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 partnership firm registered under the West Bengal Goods & Services Tax Act, 2017, was involved in a dispute concerning the enhancement of taxable turnover for the period 2018-19. The revenue authorities initiated an inspection, search, and seizure for the period 2017-18 to 2019-20. A notice in Form GST DRC-01A dated 18.09.2020 pointed out a difference in turnover between GST returns and seized documents, leading to a determination of turnover for 2018-19 at Rs.45,80,738/-. Subsequently, a show-cause notice in Form GST DRC-01 dated 07.10.2020 proposed a revised turnover of Rs.60,80,738/-, resulting in a demand of Rs.6,90,181.70 in tax, an equal amount in penalty, and Rs.3,00,853/- in interest, totaling Rs.18,98,780/-. The petitioners appealed this order to the appellate authority (respondent No.2), who disposed of the matter ex parte via an order dated 28.09.2021, which is the subject of the present writ petition.

Held

The Court held that the matter should be remanded back to the appellate authority for proper adjudication in the interest of justice and equity, as the original appeal had been disposed of ex parte without considering the merits. The Court reasoned that the principles of natural justice mandate that a party must have a fair opportunity to present their case. Consequently, the Court directed the respondent No. 2 (appellate authority) to fix a peremptory date of hearing upon service of notice to the petitioner and to pass a reasoned order after affording an opportunity of hearing within 8 weeks from the communication of the order. The Court clarified that the petitioner must appear on the fixed date, failing which the matter would be heard ex parte without further adjournment. The entire exercise was to be completed within the stipulated period. The Court also noted that there would be no order as to costs.

Key Issues

1. Whether the appellate authority erred in disposing of the appeal ex parte without considering the merits of the case, thereby violating principles of natural justice, as argued by the petitioner? 2. Whether the petitioners were afforded adequate opportunities to appear before the concerned authorities and present their case, as contended by the respondents? The petitioner argued that the matter should be remanded back to the concerned authority for proper adjudication because the appeal was disposed of ex parte. The respondents, through their learned counsel, strenuously argued that the petitioners were given ample opportunities to appear before the authority but remained absent and failed to provide any communication explaining their non-appearance. The respondents did not rely on any specific provisions, circulars, or precedents in their argument.

Sections Cited

Section 73, Section 129, Rule 86A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

04.07.2025 Sl No.4 Court No.236 (gc) WPA 504 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 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.3,71,628/- (Rs.93,61,030-Rs.89,89,402) to Rs.60,80,738/- during the period 2018-19 segregating the enhanced turnover under several heads namely Food of Rs.25,23,805/- Hukka of Rs.11,87,435/- and Banquet of Rs.8,69,498/- whereas the petitioners have 2 only room rent service of Rs.3,71,628/- 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 of 2018-19 was determined at Rs.45,80,738/- 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.60,80,738/- assessing the tax liability to the tune of Rs.6,90,181.70 with penalty of equal sum together with interest of interest of Rs.3,00,853/- being the total demand of Rs.18,98,780/-. 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 3 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 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 4 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.