M/S Chandan Patra, Bbsr vs. Union Of INDIA

Facts

The petitioner, M/s. Chandan Patra, a proprietor engaged in works contracts, challenged an Order-in-Original and a Demand-cum-Show Cause Notice issued by the Superintendent, GST and Central Excise, Bhubaneswar Range-VII. The petitioner had not charged GST on irrigation works executed in 2019-20, believing it was not attracted under the GST Act, as the tender was based on pre-GST rates. The Superintendent issued a notice alleging non-payment of GST on receipts totaling Rs.73,58,507/-. The petitioner's representative could not appear on the initial date due to medical exigency. Despite a request for accommodation and a subsequent reply filed on January 27, 2026, an Order-in-Original was passed on February 4, 2026, before the petitioner could submit all requested documents. The petitioner approached the High Court, alleging a violation of natural justice.

Held

The Court held that the Order-in-Original dated February 4, 2026, passed by the Superintendent, GST and Central Excise, Bhubaneswar Range-VII, was unsustainable due to a "glaring erroneous approach" in not adhering to the norms of natural justice. The Court noted that the Superintendent was in possession of the petitioner's reply dated January 27, 2026, as evidenced by an official acknowledgment of receipt, yet failed to take the objections into account while passing the order. This failure to consider the physically acknowledged reply was deemed a "patent violation of the principles of natural justice." Consequently, the Order-in-Original was set aside. The Court explicitly left undecided the issue of the Superintendent's jurisdiction to initiate proceedings under Section 74, including grounds of limitation or absence of necessary ingredients, reserving this for the petitioner to raise before the concerned authorities. The matter was remitted to the Superintendent for fresh consideration of the objections and the reply to the Demand-cum-Show Cause Notice, with liberty to the petitioner to raise all available objections and submit evidence. The proceedings were directed to be concluded within eight weeks of the petitioner's appearance.

Key Issues

1. Whether the Order-in-Original passed by the Superintendent, GST and Central Excise, Bhubaneswar Range-VII, is sustainable in law, given that it was allegedly passed in violation of the principles of natural justice by disregarding the reply filed by the petitioner? Petitioner's contention: The petitioner argued that the Order-in-Original was passed in "utter disregard of grundnorm of natural justice" and without considering the objections or explanation filed by the petitioner in response to the Demand-cum-Show Cause Notice. The petitioner highlighted that their reply dated January 27, 2026, was physically acknowledged by the Superintendent, yet this reply was not considered before passing the Order-in-Original dated February 4, 2026. This failure to consider the submitted reply constitutes a patent violation of natural justice principles. Revenue's contention: The judgment notes that the learned Junior Standing Counsel for the opposite parties accepted notice and participated in the hearing. However, the judgment does not explicitly record any specific arguments made by the revenue in defense of the Order-in-Original, other than implicitly defending the actions of the Superintendent.