Calcutta HC Quashes ₹5.26 Lakh GST Demand Over Procedural Lapses, Reaffirms Right to Fair Hearing [Read Order]

In a recent ruling The Calcutta High Court (Jalpaiguri Bench) has set aside a demand of ₹5.26 lakh plus interest under Section 50(1), as the order was passed in breach of statutory procedure and principles of natural justice.

The petition was filed bythe petitioner, Phuljhora Agro Plantation Pvt. Ltd., challenging the ex parte order dated 02.11.2023 issued by the adjudicating authority. The demand arose from a show cause‑cum‑demand notice dated 19.05.2023 covering the period July 2017 to March 2018.

The petitioner argued that the impugned order dated 02.11.2023 was passed in complete violation of statutory procedure and natural justice. They argued that no preliminary notice in Form GST ASMT‑10 was issued under Section 61, nor was any adjournment granted as required under Section 75(5).

They also said that the show cause‑cum‑demand notice dated 19.05.2023 was wrongly uploaded in the “Additional Notices” tab of the GST portal instead of the proper “View Notices” tab, contrary to Section 169, and was never served by registered post or email.

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For strengthening their arguments, they relied on earlier Calcutta High Court rulings in St. Xavier’s College Alumni Association and Goutam Bhowmik.

On the other hand respondent argued that the order passed is an appealable order, which can be decided by the appellate authority. Also, there was no violation of natural justice since the adjudicating authority had already granted three opportunities of personal hearing on 09.07.2023, 11.09.2023, and 29.09.2023, but the petitioners failed to attend or submit any reply to the show cause‑cum‑demand notice dated 19.05.2023.

After hearing both sides High Court observed that the impugned order dated 02.11.2023 suffered from gross technical and procedural irregularities, as the show cause‑cum‑demand notice was neither properly served nor placed in the correct portal tab, and no effective opportunity of hearing was granted to the petitioners

Justice Smita Das quashed and set aside the order with directions to the petitioners to file a reply within 15 days and the adjudicating authority to consider it, hold a proper hearing (virtual or physical), and pass a reasoned speaking order within three months, ensuring service of hearing notices by all possible modes.

Accordingly writ petition was disposed of.

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