M/S. Ab Udyog P. LTD. And Anr. vs. Asst. Com. State Tax, Tajakatra Ch. And Ors.

Facts

The appellant, M/s. AB Udyog Pvt. Ltd., filed an intra-Court appeal against an order dated 19.07.2022 passed in a writ petition. The appellant challenged an action initiated by the respondent GST Authority, the Assistant Commissioner of State Tax, Rajakatra Charge. The primary ground for challenge was that the order uploaded on the website, purported to be an adjudication order, was non-speaking and was passed without issuing any show cause notice. The appellant contended that this violated principles of natural justice and statutory provisions. The respondent GST Authority was represented by the learned Government Counsel.

Held

The Court held that the absence of a show cause notice before passing the adjudication order is a clear violation of the principles of natural justice and the provisions of the statute. This procedural defect was deemed sufficient to quash the proceeding dated 18.04.2019. The Court allowed the appeal and set aside the order passed in the writ petition. The order dated 18th April, 2019, was quashed. The Court directed the appropriate respondent to issue a show cause notice to the appellant within 15 days from the receipt of the server copy of the order. The appellant was to be granted a reasonable time to submit their reply/objections along with documents. Thereafter, the show cause notice was to be adjudicated on merits, in accordance with law, and a reasoned order was to be passed. The Court also permitted the appropriate respondent to club this adjudication with other pending adjudication proceedings.

Key Issues

1. Whether the adjudication order uploaded on the website, which is alleged to be non-speaking, is liable to be quashed for violation of principles of natural justice and statutory provisions, specifically for being passed without issuing a show cause notice? The appellant argued that the absence of a show cause notice before passing the adjudication order is a clear violation of the principles of natural justice and the provisions of the relevant statute. The appellant contended that this procedural lapse renders the entire proceeding initiated by the respondent GST Authority invalid. The revenue, represented by the learned Government Counsel, did not appear to have raised any specific counter-argument on this point, but the Court noted their presence and heard them.