Aruni Stone Crusher Vs Assistant Commissioner (Orissa High Court): GST Order Set Aside for Breach of Natural Justice
Case Overview
Case Name: Aruni Stone Crusher Vs Assistant Commissioner, CGST and Central Excise, Jajpur Division
Court: Orissa High Court
Provisions Involved: Section 74 of the Central Goods and Services Tax Act, 2017 / Odisha Goods and Services Tax Act, 2017; Section 161 of the CGST Act, 2017; Article 14 of the Constitution of India
Tax Periods Involved: Financial Years 2018–19 to 2022–23
Background and Factual Matrix
This case presents a significant judicial intervention by the Orissa High Court where a GST adjudication order was annulled on the ground that it was passed precipitously, without affording a meaningful opportunity of hearing to the assessee, and in blatant disregard of a pending writ petition before the very same Court.
Genesis of the Dispute
The assessee, Aruni Stone Crusher, was served with a Demand-cum-Show Cause Notice dated 26.06.2025 for the tax periods 2018–19 through 2022–23 under Section 74 of the Central Goods and Services Tax Act, 2017 and the Odisha Goods and Services Tax Act, 2017. In response, the assessee filed an application for rectification under Section 161 on 24.08.2025. When this rectification application was rejected by the authority, the assessee approached the Orissa High Court by way of W.P.(C) No.27456 of 2025.
The High Court, vide its order dated 25.09.2025, disposed of the said writ petition with a clear direction to the concerned authority to:
- Consider the rectification application filed by the assessee
- Proceed further in connection with the original Demand-cum-Show Cause Notice dated 26.06.2025
Deviation from Court's Directions
Rather than complying with the spirit and letter of the Court's order dated 25.09.2025, the Proper Officer took an entirely different course of action. Instead of proceeding on the basis of the original notice dated 26.06.2025, a fresh Demand-cum-Show Cause Notice dated 17.11.2025 was issued, accompanied by a Summary of Show Cause Notice in Form GST DRC-01 dated 25.11.2025, clubbing together all the financial years from 2018–19 to 2022–23.
This action was challenged by the assessee before the High Court through W.P.(C) No.36758 of 2025, raising, among other grounds, the issue of limitation — which involved a mixed question of law and fact.
The Contested Personal Hearing and Hasty Order
A notice for personal hearing was issued on 08.12.2025, fixing the date of hearing as 18.12.2025. On that date, the authorized representative of the assessee appeared before the Proper Officer and explicitly brought to the authority's notice that:
- A writ petition bearing Filing No. D-WPC/52838/2025 and CNR ODHC010921722025 had already been filed before the Orissa High Court on 16.12.2025, challenging the revised Show Cause Notice
- The assessee was awaiting the outcome of the said writ petition
- A request was made to keep the hearing in abeyance pending the Court's decision
Despite this clear communication, the Proper Officer passed the Order-in-Original on 19.12.2025 — just one day after being informed of the pending writ petition — finalizing the demand under Section 74 of the GST Act.