J M Mhatre Infra PVT. LTD Thr. Authorized Chetan J. Mhatre vs. Union Of INDIA Thr. Secretary And Ors

Facts

The Petitioner, JM Mhatre Infra Pvt. Ltd., filed a writ petition challenging an order passed by the Adjudicating Officer. The Petitioner contended that the impugned order was passed in breach of principles of natural justice as they were not granted a personal hearing. The Revenue, represented by the State, argued that the Petitioner had ticked 'No' in the option for personal hearing in Form GST DRC-06, thereby waiving their right. However, the Petitioner's reply to the Show Cause Notice explicitly requested a personal hearing. The impugned order, dated 28th February 2022, is the subject of the challenge.

Held

The Court held that the impugned order was passed in breach of the principles of natural justice. The Court found that while the Petitioner had ticked 'No' in the personal hearing option in Form GST DRC-06, this appeared to be an inadvertent error, especially since the Petitioner had specifically requested a personal hearing in their reply to the Show Cause Notice. The Court relied on Section 75(4) of the CGST Act, which mandates an opportunity of hearing where a request is received or where an adverse decision is contemplated. The Court reasoned that a mechanical approach by the adjudicating officer, focusing solely on the ticked box without considering the explicit request for a hearing, was incorrect. The ratio decidendi is that an explicit request for a personal hearing in the reply to a show cause notice, even if contradicted by an inadvertent tick in a form, obligates the adjudicating authority to grant a hearing. The Court quashed and set aside the impugned order and directed the Adjudicating Officer to grant an opportunity of personal hearing to the Petitioner and pass an appropriate order.

Key Issues

1. Whether the impugned order dated 28th February 2022 was passed in breach of the principles of natural justice, specifically concerning the Petitioner's right to a personal hearing under Section 75(4) of the CGST Act? Petitioner's Arguments: The Petitioner argued that despite explicitly requesting a personal hearing in their reply to the Show Cause Notice, the Adjudicating Officer failed to grant one. They contended that ticking 'No' in the personal hearing option in Form GST DRC-06 was an inadvertent error and not an express waiver of their right. They relied on the decision in Kuehne Nagel Pvt. Ltd. Vs. State of Maharashtra. Revenue's Arguments: The Revenue argued that the Petitioner had ticked 'No' in the personal hearing option in Form GST DRC-06, indicating a waiver of their right to a personal hearing. They submitted that every possible opportunity was given to the Petitioner to reply to the Show Cause Notice.