Failure to examine legality of ITC availed: Calcutta HC Remands Appeal of Bajaj Wheels to GST adjudicating authority [Read Order]

In a recent case, the Calcutta High Court remanded the appeal of Bajaj Wheels to the Goods and Services Tax (GST) adjudicating authority on finding that the authority failed to examine the legality of the ITC availed. The court found that no fruitful purpose would be served by keeping the matter pending.

Bajaj Wheels Private Limited , the petition filed application praying for a hearing of the writ petition on urgent basis. Although order was passed on 13 June, 2025, however, the matter has come under the heading "To Be Mentioned to seek clarification. Since then the respective parties are permitted to reargue the matter.

The petitioner challenged the order passed by the Appellate Authority dated 18 December, 2024 allowing such appeal, arising out of an appeal filed by the department from the order dated 30 October, 2023 for the tax period 210 July, 2017 in March, 2018 against the dropping of the proceeding initiated on the strength of the show-cause cum demand notice dated 12 October, 2022 against the petitioner, the instant writ petition has been filed.

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The petitioner would complain that the petitioner did not have adequate notice of the appeal to appear before the Appellate Authority, and the appeal petition along with the grounds of appeal was also not served. Having heard the advocates appearing for the respective parties and noting that from the order dated & December, 2024 passed by the Appellate Authority, it is not clear whether the order impugned in the appeal had been set aside, since the operative portion of the order only records that the appeal has been allowed, it was directed the advocate representing the respondents to take appropriate instruction in this matter.

The court found that no fruitful purpose would be served by keeping the matter pending. Though, the consequential direction of setting aside of the order passed by the adjudicating authority is not explicit from the order impugned, however, since the appellate authority in has been pleased to record that the adjudicating authority has failed to examine the legality of ITC availed by the respondent who is the petitioner under the various tables and the petitioner also having not submitted any clarification. nor attended the personal hearing and also by noting that the adjudicating authority has failed to discuss the various issues involved and having not passed a speaking order, the said appeal was allowed.

Although, the appellate authority was required to make such further enquiry as may be necessary so as to take a firm decision, the same has not been done. The appellate authority has only observed that the adjudicating authority has failed to examine the legality of ITC availed. The above direction is dehors the provisions of Section 107(11) and (12) of the said.

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A single bench of Justice Raja BasuChowdhury, while setting aside the order impugned, including the order passed by the adjudicating authority dated 30th October, 2023, let the matter stand remanded back before the adjudicating authority for a fresh decision on merits.

The adjudicating authority is directed to decide upon the aforesaid within a period of eight weeks from the date of communication of this order by issuing an appropriate notice of hearing and by affording an opportunity of hearing to the petitioner.

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