Bombay High Court Sets Aside GST Order Passed Before Scheduled Date Of Hearing

The Bombay High Court has set aside a GST adjudication order passed even before the scheduled date of hearing, holding that it was vitiated by a breach of natural justice.

A bench of Justices G S Kulkarni and Aarti Sathe held that the order was passed before the scheduled hearing date fixed in the show cause notice.

“The impugned order, however, was passed on 30 March 2022 in regard to which, admittedly, no hearing was granted to the petitioner as also no opportunity to file reply to the said notice, was not granted to the petitioner. In this view of the matter, we are of the opinion that the petition needs to succeed on the limited ground that the impugned order has been passed in breach of the principles of natural justice.”, the court observed.

The case arose from a writ petition filed by Rajkala Enterprises Pvt. Ltd., which challenged an ex parte order dated March 30, 2022, along with subsequent attachment notices issued in June 2023. The petitioner also sought protection from coercive recovery steps initiated pursuant to the order.

The petitioner contended that a show cause notice dated March 11, 2022 had specifically directed it to appear before the State Tax Officer on April 22, 2022 at 11 a.m. and to file its reply in Form GST DRC-06 along with supporting evidence.

However, even before the scheduled hearing date, the authority proceeded to pass the adjudication order on March 30, 2022.

The court noted that the notice itself clearly granted time to the petitioner to respond and appear for hearing. Extracting the relevant portion, the Bench recorded:

“Ms. Rajkala Enterprises Private Limited are also directed to attend at aforesaid office Address at 11.00 a.m. on 22.04.2022. Ms. Rajkala Enterprises Private Limited are also directed to file or cause to be filed representation in FORM GST DRC 06 along with evidence on which you rely in support of your claim on common portal.”

Despite this, the order came to be passed much prior to the scheduled date. The Court found that no hearing was granted and no opportunity to file a reply was provided before the order was issued.

Holding that the petition needed to succeed on this limited ground, the Court quashed and set aside the order dated March 30, 2022.

The matter has been remanded to the adjudicating authority for fresh consideration with a direction to grant the petitioner an opportunity of hearing. Fresh order needs to be passed within three months.

For Petitioners: Advocate Bharat Raichandani with Bhagrati Sahu

For State: Addl. Govt. Pleader Jyoti Chavan