GST adjudication orders passed without mandatory personal hearing where adverse decisions are contemplated are unsustainable.

The petitioner challenged, inter alia, the adjudication order dated 24 April 2024 passed by Respondent No. 3 under Section 73 of the West Bengal Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017.

The order had been passed ex parte and the petitioner’s appeal was dismissed on the ground of limitation.

A show-cause notice in Form DRC-01 dated 26 December 2023 demanding tax, interest and penalty was uploaded on the GST portal under the tab “Additional Notice and Orders”, allegedly causing the petitioner to submit the reply belatedly.

The adjudication order was uploaded under the same tab, and the petitioner claimed that he became aware of it only after receiving a telephone call from the GST Department on 10 July 2026.

The State argued that the petitioner had filed his reply belatedly and had not specifically requested a personal hearing.

Whether the adjudication order dated 24 April 2024 was vitiated because the show-cause notice and adjudication order were uploaded only under the “Additional Notice and Orders” tab without separate intimation, thereby depriving the petitioner of effective notice?

Whether Section 75(4) of the CGST Act and the WBGST Act required the proper officer to provide the petitioner an opportunity of personal hearing before passing an adverse adjudication order, even in the absence of a specific written request for hearing?

Whether the impugned adjudication order was liable to be quashed for violation of the principles of natural justice?

The Court applied Section 75(4) of the CGST Act, 2017 and the corresponding provision of the WBGST Act, which mandates that an opportunity of hearing shall be granted where a written request is made by the person chargeable with tax or penalty or where any adverse decision is contemplated against such person.

The Court relied on the Division Bench decision in Goutam Bhowmik v. State of West Bengal, (2024) 158 taxmann.com 399 (Calcutta), which held that where an adverse decision is contemplated, the proper officer must afford an effective opportunity of personal hearing and communicate the date, time and venue of such hearing.

The Court further applied the principles of natural justice, particularly the requirement of effective notice and a meaningful opportunity to respond before an adverse adjudicatory decision is rendered.

The Court found that the petitioner had made out a prima facie case because both the show-cause notice and the adjudication order were uploaded only under the “Additional Notice and Orders” tab, with no separate intimation to the petitioner.

This mode of communication allegedly caused the petitioner to file the reply belatedly and prevented him from having timely knowledge of the adjudication proceedings and order.

The State’s contention that no personal hearing was required because the petitioner had not specifically requested one was inconsistent with Section 75(4), which independently mandates a hearing where an adverse decision is contemplated.

Applying the principle stated in Goutam Bhowmik, the Court held that the absence of an effective hearing opportunity rendered the adjudication process contrary to natural justice.

Respondent No. 3 was directed to reconsider the matter after taking into account the petitioner’s reply dated 13 March 2024.

Respondent No. 3 was further directed to provide the petitioner an opportunity of personal hearing and to pass a fresh, reasoned adjudication order in accordance with law within twelve weeks from the date of the judgment, with communication of the decision to the petitioner within one week thereafter.

The writ petition was accordingly disposed of.