Order Violated Principles of Natural Justice Due to Inadequate Communication
In a significant ruling, the Calcutta High Court has set aside an ex parte adjudication order issued against M/s. B. Enterprise by the State of West Bengal under the West Bengal Goods and Services Tax Act, 2017. The order, initially passed on April 12, 2024, was challenged by the petitioners on grounds of violation of principles of natural justice due to improper communication and lack of personal hearing.
Justice Hiranmay Bhattacharyya, presiding over the case, noted the critical flaws in the procedural execution by the adjudicating authority. The court found that the show-cause notice and the subsequent reminder letter, which were essential procedural components, were uploaded in an "Additional notices and orders Tab" rather than the "Normal Tab," leading to ineffective communication with the petitioners. Moreover, these notices failed to specify the date, time, and venue for a personal hearing, a crucial element for ensuring fair adjudication.
The petitioners, represented by Mr. Himangshu Kumar Ray and his legal team, argued that they were unaware of the adjudication proceedings and only discovered the order upon receiving a demand for payment dated May 18, 2026. This discovery came after the period for filing an appeal had expired, prompting them to seek relief under Article 226 of the Constitution of India.
The court's decision draws upon precedents set by similar cases, including the notable case of Ram Kumar Sinhal v. State of West Bengal, where the Hon'ble Division Bench determined that uploading notices in the 'Additional notices and orders' tab does not constitute proper communication.
In its judgment, the court emphasized the necessity of adhering to the principles of natural justice, which mandate that all parties must be given a fair opportunity to present their case. Justice Bhattacharyya ordered the adjudicating authority to reconsider the issue afresh, allowing M/s. B. Enterprise to file a reply to the show-cause notice within 14 working days. The authority is also directed to fix a new date for hearing and issue a reasoned order thereafter.
This ruling underscores the judiciary's commitment to ensuring fair administrative processes, especially in matters involving significant financial implications for businesses. Legal experts view this judgment as a reinforcement of procedural fairness in tax adjudications under the WBGST Act.
Bottom line:-
Principles of natural justice - Adjudication order passed under Section 73(9) of the WBGST Act, 2017 was set aside due to lack of effective communication of show-cause notice and denial of opportunity for personal hearing.
Statutory provision(s):
West Bengal Goods and Services Tax Act, 2017 Section 73(9)
M/s. B. Enterprise v. State of West Bengal, (Calcutta) : Law Finder Doc id # 2945260
