Case Note & Summary
The Petitioner, Evergreen Recyclekaro (India) Limited, filed a Writ Petition under Article 226 of the Constitution of India before the High Court of Judicature at Bombay challenging a Show Cause Notice (DRC-01) dated 18th October 2024 and the resultant adjudication Order (DRC-07) dated 20th December 2024 issued by Respondent No. 2 (the Principal Commissioner of State Tax, Konkan Bhavan, Belapur) for the financial year 2020-2021 under the Maharashtra Goods and Services Tax Act, 2017. The Petitioner contended that despite making a specific request for a personal hearing in its reply to the Show Cause Notice, the adjudicating authority passed the order without granting any hearing, thereby violating the principles of natural justice. The Petitioner sought quashing of both the Show Cause Notice and the Order. The Respondents, represented by the Additional Government Pleader, opposed the petition. The Court, after hearing both sides, examined the provisions of Section 75(4) of the MGST Act, which mandates that where the person chargeable with tax requests a personal hearing, the proper officer shall grant such hearing. The Court found that the Petitioner had indeed requested a personal hearing in its reply, but the authority failed to provide one. The Court held that this failure constituted a serious breach of natural justice, rendering the impugned order void ab initio. Consequently, the Court quashed and set aside the Order dated 20th December 2024 and the Show Cause Notice dated 18th October 2024. However, the Court granted liberty to the Respondents to issue a fresh Show Cause Notice and proceed with adjudication in accordance with law, after granting a reasonable opportunity of hearing to the Petitioner. The Court clarified that it had not expressed any opinion on the merits of the case and that all contentions of both parties were kept open.
Headnote
A) Constitutional Law - Writ Jurisdiction - Article 226 of the Constitution of India - Maintainability - Petition under Article 226 challenging Show Cause Notice and adjudication order under GST laws - Court entertained the petition as the order was passed without granting personal hearing, a fundamental breach of natural justice (Para 1). B) Goods and Services Tax - Adjudication - Personal Hearing - Section 75(4) of the Maharashtra Goods and Services Tax Act, 2017 - Mandatory requirement - Where the assessee requests a personal hearing, the adjudicating authority must grant one - Failure to do so renders the order void ab initio - Held that the impugned order dated 20th December 2024 is quashed and set aside (Paras 3-5). C) Goods and Services Tax - Show Cause Notice - Validity - Section 73 of the MGST Act - Show Cause Notice and DRC-01 dated 18th October 2024 - Court did not delve into merits of the notice as the matter was remanded for fresh adjudication after granting personal hearing (Paras 1, 5).
Issue of Consideration
Whether the impugned Show Cause Notice and the resultant Order passed under Section 73 of the MGST Act are sustainable in law when the Petitioner was not granted a personal hearing despite a specific request, thereby violating the principles of natural justice.
Final Decision
The Court quashed and set aside the Show Cause Notice dated 18th October 2024 and the Order dated 20th December 2024. The Respondents were granted liberty to issue a fresh Show Cause Notice and proceed with adjudication in accordance with law, after granting a reasonable opportunity of hearing to the Petitioner. All contentions of both parties were kept open.
Law Points
- Natural justice
- Personal hearing
- Section 75(4) MGST Act
- Section 73 MGST Act
- Show cause notice
- DRC-01
- DRC-07
- Violation of principles of natural justice
- Quashing of order
- Remand
