Calcutta HC Restores GST Appeal: Adjudication Set Aside Due to Portal Upload Deficiencies and Denial of Personal Hearing

The Calcutta High Court recently intervened in a matter concerning procedural irregularities in GST adjudication and appellate proceedings. The judgment addresses critical issues relating to proper service of notices through the GST portal, compliance with natural justice principles, and the mandatory requirement of personal hearings under the GST statute.

Background of the Dispute

In the case of Rajkumar Dyeing & Printing Works Private Limited Vs Deputy Commissioner of State Tax, the assessee approached the Calcutta High Court through a writ petition to challenge an appellate order issued on June 25, 2025. The said order was passed by the Appellate Authority exercising powers under Section 107 of the WBGST Act, 2017/CGST Act, 2017. The appeal filed by the assessee had been rejected by the Appellate Authority purely on grounds of delay in filing, without examining the substantive merits of the case.

The controversy arose from a series of procedural lapses that began with the issuance of the show cause notice and continued through the adjudication process. The assessee's grievance centered on the manner in which communications were effected through the GST electronic portal, specifically questioning whether proper notice was actually served.

Key Contentions Raised by the Assessee

Improper Service of Notice Through Portal

The primary submission advanced by the assessee was that the delay in filing the appeal before the Appellate Authority was not attributable to any negligence on its part. The assessee argued that it remained unaware of the adjudication order because the same was uploaded in the "Additional Notices and Orders" tab on the GST e-portal, rather than being placed in the main tab where assessees would ordinarily check for communications from the department.

This method of uploading, according to the assessee, effectively defeated the purpose of notice as the assessee could not reasonably be expected to discover documents placed in such an obscure location within the portal architecture.

Violation of Natural Justice Principles

The assessee further contended that the entire adjudication process was conducted in gross violation of natural justice principles. The show cause notice itself had been served using the same defective method—uploaded only in the "Additional Notices and Orders" tab—thereby depriving the assessee of any meaningful opportunity to respond to the allegations raised in the notice.

Non-Compliance with Statutory Mandate for Personal Hearing

A crucial statutory argument raised by the assessee pertained to Section 75(4) of the CGST Act, 2017. This provision explicitly mandates that before passing any order imposing liability on an assessee, the proper officer must grant an opportunity of personal hearing. The assessee submitted that despite this clear statutory requirement, no opportunity for personal hearing was afforded at any stage of the adjudication proceedings.

Lack of Reasoning in Adjudication Order

The assessee also challenged the quality and content of the adjudication order itself. It was submitted that the order passed by the adjudicating authority was wholly unreasoned and failed to provide any basis or rationale for the conclusions reached. The order did not explain the evidence considered, the reasoning process followed, or the legal basis for the liability imposed.

Defense by State GST Authorities

The State GST authorities defended the impugned appellate order on the ground that the existing system ensures automatic notifications. The learned counsel appearing for the respondent authorities argued that whenever any document is uploaded on the GST portal, automated notifications are sent to the registered mobile number and email address of the assessee.

The appellate order itself had recorded a finding that if the SMS history of the assessee's mobile phone and the email history were examined, it could be established that notifications must have been dispatched to the assessee's registered contact details.

However, the authorities could not produce any concrete evidence demonstrating that such notifications were actually sent and received. The defense essentially rested on an assumption that the system must have functioned as designed, without verification of actual delivery.

Evidence Produced Before the Court

To counter the authorities' contentions, the assessee produced before the Court a screenshot of the email inbox associated with the registered email address. This documentary evidence demonstrated that no notification of the kind described by the Appellate Authority had ever been received by the assessee.

The Court retained this screenshot as part of the record and directed that a copy be served upon the counsel representing the State GST authorities, thereby allowing them an opportunity to respond to this evidence.

Judicial Precedent Relied Upon

The assessee's counsel placed reliance on a coordinate Bench decision of the Calcutta High Court in Sankar Agarwala v. Joint Commissioner of CGST and Central Excise, decided in WPA 2116 of 2025 on November 03, 2025. In that matter, the Court had encountered similar defects in the adjudication process and had granted relief to the assessee by setting aside both the adjudication and appellate orders.

The facts in Sankar Agarwala (supra) bore striking resemblance to the present case, particularly concerning the failure to grant personal hearing despite statutory mandate and procedural irregularities in service of notices.

Court's Analysis and Findings

Undisputed Fact of Upload in Additional Tab

The Court noted that it was not disputed by either party that both the show cause notice and the adjudication order were uploaded exclusively under the "Additional Notices and Orders" tab on the GST e-portal. This method of communication was found to be problematic as it did not ensure effective notice to the assessee.