Gannon Dunkerley And Co Limited vs. State Of Chhattisgarh

Facts

The petitioner, Gannon Dunkerley and Co Limited, filed a writ petition challenging an order dated 19.06.2025 passed by the Additional Commissioner of State Tax (Appeal), respondent No.2. This order rejected the petitioner's appeal and upheld an ex-parte demand order dated 29.04.2024 passed by the Deputy Commissioner of State Tax, respondent No.3. The demand order pertained to the Financial Year 2018-19. The petitioner had filed its annual return for FY 2018-19, declaring a turnover of Rs.60,97,61,933/-. A scrutiny notice was issued on 11.12.2023, followed by a show cause notice on 27.12.2023 proposing a tax liability, interest, and penalty. The petitioner replied to the show cause notice. However, respondent No.3 passed an ex-parte demand order without affording an opportunity of hearing. The petitioner's appeal to respondent No.2 was filed with a delay of 26 days and an application for condonation of delay. Respondent No.2 rejected the appeal summarily, citing delay in submission.

Held

The Court held that there is an inbuilt mechanism in the Act of 2017 for compliance with natural justice, mandating an opportunity of hearing before any adverse decision is contemplated or tax liability is determined, as per Section 75(4). The Appellate Authority is required to examine whether this mandate was followed and to pass a reasoned and speaking order as per Section 107(12). The Court found that the Appellate Authority failed to consider the application for condonation of delay and did not assign any cogent reason for rejection, despite the delay of only 26 days being within the condonable period under Section 107(4). The Court noted that the Supreme Court has emphasized a pragmatic and justice-oriented approach to 'sufficient cause'. Therefore, the Court concluded that there was no intention on the part of the petitioner to cause delay and the impugned order was passed summarily. The delay of 26 days in filing the appeal was condoned, and the matter was remitted to the Appellate Authority to pass a fresh, speaking order after providing sufficient opportunity of hearing to the petitioner.

Key Issues

1. Whether the ex-parte demand order dated 29.04.2024 passed by respondent No.3 is vitiated for non-compliance with the principles of natural justice, specifically the requirement of an opportunity of hearing under Section 75(4) of the Chhattisgarh Goods & Services Tax Act, 2017? 2. Whether the Appellate Authority (respondent No.2) erred in summarily rejecting the petitioner's appeal on grounds of delay without properly considering the application for condonation of delay and the provisions of Section 107(4) of the Act 2017? Petitioner's Arguments: The petitioner argued that the ex-parte demand order was arbitrary and passed without providing an opportunity of hearing. They contended that the Appellate Authority also failed to examine the cause of delay, despite the application being filed within the condonable period under Section 107(4). The petitioner emphasized that Section 75(4) mandates an opportunity of hearing when an adverse decision is contemplated. Furthermore, they cited Section 107(12), requiring the Appellate Authority to pass a reasoned and speaking order. Reliance was placed on cases like Ramji Kirana Store Vs. State of U.P. and Tata Steel Ltd. Vs. State of Chhattisgarh. Respondents' Arguments: The State Government opposed the petitioner's submissions. However, the Government Advocate admitted that the show cause notice issued under Section 73 of the Act 2017 did not provide complete details regarding the date, time, and venue of the personal hearing, with "NA" mentioned for these columns.