Abid Hussain vs. The Appellate Authourity

Held

The Court held that the impugned order dated 17.10.2025 passed by the Additional Commissioner, Appellate Authority, CGST & Excise, Bhopal, was vitiated due to procedural irregularities. The Court found that although a hearing notice was issued on 08.07.2025 for a hearing on 14.07.2025, the order was passed pursuant to a hearing held on 09.05.2025. There was no hearing conducted after the notice dated 08.07.2025 was issued. This lack of a proper opportunity of hearing for the petitioner before the final order was passed was deemed a significant procedural flaw. Consequently, the Court decided to remand the matter back to the appellate authority. The appellate authority, i.e., the Additional Commissioner, CGST and Excise, Bhopal, was directed to decide the matter afresh after affording a proper opportunity of hearing to the petitioner. The Court did not delve into the merits of the tax demand or penalty.

Facts

The petitioner, Abid Hussain, a Multi System Operator (M.S.O.) in the cable television business, challenged an order dated 17.10.2025 passed by the Additional Commissioner, Appellate Authority, CGST & Excise, Bhopal. The petitioner operates by purchasing signals and transmitting them to Local Cable Operators (L.C.O.s), who then distribute to subscribers. Under the business model and TRAI regulations, the M.S.O. retains 10% of revenue, and L.C.O.s retain 90%. The petitioner has been filing GST returns and paying tax on his retained revenue. Following a complaint, State GST authorities found no irregularity. However, Central GST authorities issued a show cause notice under Section 74 of the CGST Act for the period 2017-18 to 2020-21, consolidating all years into one notice. The adjudicating authority confirmed the demand, interest, and penalty without considering the actual revenue retained by the petitioner and L.C.O.s. The petitioner appealed this order. During the appeal process, the case was transferred, and a hearing notice was issued, but the impugned order was passed without a subsequent hearing.

Key Issues

1. Whether the impugned order dated 17.10.2025 passed by the Additional Commissioner, Appellate Authority, CGST & Excise, Bhopal, is vitiated due to procedural irregularities, specifically the absence of a proper hearing after the transfer of the appeal and issuance of a fresh notice for hearing? Petitioner's arguments: The petitioner contended that the appellate authority passed the impugned order without affording him a proper opportunity of hearing. He argued that although a hearing notice was issued on 08.07.2025 for a hearing on 14.07.2025, the order was passed pursuant to a prior hearing on 09.05.2025, and no hearing took place after the notice dated 08.07.2025. This procedural lapse, according to the petitioner, renders the order unsustainable. Revenue's arguments: The judgment does not record any specific arguments made by the respondents (Appellate Authority and others).