Shankar Prasad Gupta vs. State Of West Bengal And Ors.

Facts

The petitioner, Shankar Prasad Gupta, filed a writ petition challenging an ex-parte adjudication order dated 06.03.2024, passed by Respondent No. 3 under Section 73 of the WBGST Act and CGST Act. A show cause notice dated 01.11.2023 was issued, demanding tax, interest, and penalty. The petitioner claims this notice was uploaded on the GST portal under the 'Additional Notice and Orders' tab, preventing them from submitting a reply. Consequently, an ex-parte adjudication order was passed, of which the petitioner only became aware upon receiving a recovery notice from a bank on 02.04.2026. The petitioner argued that the proceedings violated principles of natural justice and statutory procedure. The State-respondents contended that the petitioner did not file a reply or request a personal hearing, and there is no specific rule mandating a hearing before adjudication.

Held

The Court held that the petitioner had made out a prima facie case. It observed that the show cause notice and the adjudication order were uploaded only under the 'Additional Notice and Orders' tab, and no separate intimation was provided to the petitioner. This fact prevented the petitioner from submitting a reply. The Court found that the petitioner was denied a personal hearing, which is evident from the summary of the show cause notice. Relying on Section 75(4) of the CGST Act, 2017, which mandates an opportunity of hearing where a request is received or where an adverse decision is contemplated, the Court concluded that the petitioner's right to be heard was violated. Therefore, the adjudication order dated 06.03.2024 and the consequential recovery notice were quashed and set aside. The Court directed the petitioner to file a comprehensive reply to the show cause notice within three weeks and directed Respondent No. 3 to revisit the issue, consider the reply, afford a personal hearing, and pass a fresh reasoned adjudication order within 12 weeks. The decision was to be communicated to the petitioner within a week thereafter.

Key Issues

1. Whether the ex-parte adjudication order dated 06.03.2024, passed under Section 73 of the WBGST Act and CGST Act, is illegal and invalid due to violation of principles of natural justice and statutory procedure? Petitioner's arguments: The petitioner argued that the show cause notice and the adjudication order were uploaded solely under the 'Additional Notice and Orders' tab on the GST portal, without separate intimation, which prevented them from filing a reply. This lack of opportunity to respond, coupled with the ex-parte nature of the order, violates the principles of natural justice. They also contended that the entire proceedings were contrary to the prescribed procedure under the Act. The petitioner relied on paragraphs 7 to 9 of the Division Bench judgment in Goutam Bhowmik –v.- State of West Bengal (2024) 158 taxmann.com 399 (Calcutta), which emphasized the mandatory nature of affording an opportunity of hearing when an adverse decision is contemplated, as per Section 75(4) of the WBGST/CGST Act, 2017. State-respondents' arguments: The State-respondents argued that the petitioner did not file any reply to the show cause notice and did not request an opportunity for a personal hearing. They asserted that the GST Department proceeded based on the available information. They further submitted that there is no specific rule under the statute that mandates providing an opportunity of hearing to the petitioner prior to passing an adjudication order.