Swarna Ecocrafts vs. The Commissioner

Facts

The petitioner, Swarna Ecocrafts, challenged an order dated 20.02.2025 passed by the Deputy State Tax Officer-1 (4th respondent) and subsequent communications dated 16.06.2025 and 18.08.2025 from the State Tax Officer (3rd respondent). The petitioner contended that the impugned order was passed ex-parte without providing a proper hearing. They argued that the notice was uploaded to the petitioner's portal but contained a different name, making it impossible for them to peruse it. This led to the petitioner being unaware of the proceedings and unable to respond. The revenue, represented by the Additional Government Pleader, suggested that the order could be set aside and remanded if 25% of the disputed amount was paid.

Held

The Court held that the impugned order and subsequent communications were liable to be set aside. The primary reasoning was that the notice issued to the petitioner was uploaded to their portal with a different name, which prevented the petitioner from perusing it. This, coupled with the fact that an ex-parte order was passed without hearing the petitioner, violated the principles of natural justice. The Court noted that the issue pertained to an excess claim of Input Tax Credit (ITC) which was allegedly remitted by the supplier but not reflected in the GST system. The Court, considering the submissions of both sides, decided to set aside the impugned order and communications. The matter was remanded back to the respondents for fresh consideration, subject to the petitioner paying 25% of the disputed amount. The petitioner was directed to file their reply within two weeks of payment, and the respondents were directed to issue fresh notice and decide the issue after hearing the petitioner within four weeks thereafter.

Key Issues

1. Whether the impugned order passed by the 4th respondent and subsequent communications from the 3rd respondent are liable to be quashed on the ground that they were passed ex-parte without affording a proper opportunity of hearing to the petitioner, as contemplated under the relevant provisions of the GST Act? Petitioner's contentions: The petitioner argued that the notice issued by the respondents was uploaded to their portal but bore a different name, preventing them from accessing and understanding its contents. Consequently, the ex-parte order was passed without their knowledge or participation, violating principles of natural justice. They relied on the fact that the notice was not properly served or identifiable. Revenue's contentions: The respondents, through the Additional Government Pleader, did not dispute the petitioner's claim of lack of hearing. Instead, they proposed a settlement where the impugned order could be set aside and the matter remanded for fresh consideration upon payment of 25% of the disputed amount.