Calcutta High Court Quashes GST Adjudication Order Over Denial of Personal Hearing Under Section 75(4)

The fundamental principles of natural justice form the bedrock of any fair administrative or quasi-judicial process. In the realm of Goods and Services Tax (GST), the statutes explicitly embed these principles to ensure that an assessee is not condemned unheard. A recent judicial pronouncement by the Calcutta High Court in the matter of Rafiqul Hasan Vs State of West Bengal & Ors. serves as a crucial reminder to revenue authorities regarding the mandatory nature of providing a personal hearing, especially when an adverse decision is contemplated against the assessee.

This comprehensive analysis delves into the factual background, the legal arguments presented, and the ultimate ruling of the High Court, which set aside both the adjudication and appellate orders due to procedural lapses and apparent non-consideration of the assessee's written submissions.

The Factual Matrix of the Dispute

The controversy stems from adjudication proceedings initiated against the assessee for the financial year 2018-2019. The chronological sequence of events is critical to understanding the procedural discrepancies that led to the High Court's intervention.

The revenue department issued a show-cause notice (SCN) in Form GST DRC-01 to the assessee on 19 December 2023. This notice mandated the assessee to submit a formal reply by 19 January 2024. Concurrently, the authorities scheduled a personal hearing for 11 January 2024.

The assessee was unable to file the written response by the stipulated deadline of 19 January 2024. However, an authorized representative of the assessee did appear before the adjudicating authority on the scheduled date of the personal hearing, which was 11 January 2024, to present the case verbally.

Subsequently, the assessee compiled a written reply to the SCN on 9 March 2024 and dispatched it to the respondent authorities via Speed Post on 11 March 2024. Despite the submission of this written defense, the adjudicating authority proceeded to pass the final order under Section 73 of the WBGST Act/CGST Act, 2017 on 20 March 2024.

Aggrieved by this adverse adjudication order, the assessee escalated the matter by filing an appeal on 3 December 2024. The appellate authority, however, did not find merit in the assessee's grievances and subsequently dismissed the appeal via an order dated 27 January 2025. This dismissal prompted the assessee to invoke the writ jurisdiction of the Calcutta High Court.