High Court sets aside adjudication order for lack of natural justice, remits for fresh decision

The High Court found a violation of natural justice in an adjudication order based on a CRCL report without providing the petitioner an opportunity to object. The Court noted that the petitioner's objections were not considered in the order, as they were not given the complete CRCL report until after the hearing had commenced. Despite submitting objections later, they were not addressed by the adjudicating authority. Consequently, the Court allowed the writ petition, setting aside the order and remitting the matter for a fresh decision, directing the authority to provide the petitioner with the complete report and allowing time for a detailed reply to ensure compliance with due process and natural justice.

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Issues:
Violation of natural justice in adjudication order based on CRCL report without providing opportunity to object.

Analysis:
The petitioner challenged an adjudication order passed by the Commissioner, Central Tax, GST, Gautambudh Nagar, which was based on a report from the Central Revenue Control Laboratory (CRCL) regarding the chemical composition of products "Harvest Plus" and "Cash Plus". The petitioner contended that the order violated the principles of natural justice as they were not given an opportunity to object to the CRCL report. The petitioner raised objections after a virtual hearing on 20.10.2020, pointing out similarities between the CRCL report and a previous report from M/S Cytozyme Sustainable Nutritional Solutions, USA.

The High Court noted that the petitioner was not provided with the complete CRCL report until 20.10.2020, after the hearing had already commenced. The Court found that the petitioner's objections were not considered in the impugned order, indicating a violation of natural justice. Despite the petitioner submitting objections on 26.10.2020, the adjudicating authority failed to address these objections in the final order. The Court emphasized that the petitioner should have been given a reasonable opportunity to object to the adverse material before a decision was made.

In response to a counter affidavit filed by the revenue authorities, it was revealed that the CRCL report was first provided to the petitioner on 20.10.2020. The Court concluded that the petitioner was not granted adequate time to respond to the report, further emphasizing the breach of natural justice. As a result, the Court allowed the writ petition, setting aside the adjudication order and remitting the matter back to the assessing authority for a fresh decision. The Court directed the adjudicating authority to provide the petitioner with a complete hard copy of the test report and allow two weeks for a detailed reply before issuing a new order, ensuring compliance with due process and the principles of natural justice.

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