GST authority violated natural justice under Section 75(4) by passing adverse order without proper show cause notice

The Patna HC allowed a writ petition challenging an order under the Central Goods and Services Tax Act, 2017, despite availability of statutory appeal remedy. The court found the impugned order violated principles of natural justice under Section 75(4) of the Act, as no show cause notice was issued or referenced before passing the adverse order. Although respondents claimed a notice was issued, the order contained no mention of it or petitioner's explanation. The court drew inference that natural justice principles were breached and remanded the matter to the concerned authority for fresh proceedings within six months, directing compliance with statutory provisions.

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The Court considered a petition challenging an order passed by the respondent under the Central Goods and Services Tax Act, 2017. The petitioner sought relief, including setting aside the order, quashing certain notifications, and any other relief deemed appropriate. The core issue was whether the petitioner should have first pursued the statutory remedy of appeal before the Appellate Authority before approaching the Court under Article 226 of the Constitution of India.The Court noted that under Section 75(4) of the Act, an opportunity of hearing must be granted before an adverse decision is made. The petitioner argued that they were not provided with an opportunity to respond to the proposed order before it was passed. The respondents contended that a show cause notice had been issued and that the petitioner had been given a personal hearing, which was recorded in the order.Upon review, the Court found that there was no evidence that the petitioner had been given an opportunity to respond specifically to the adverse order in question. While the respondents claimed that show cause notices had been issued, the Court observed that the order did not reference the issuance of such notices or the petitioner's explanation in relation to the adverse order. The Court concluded that the impugned order was in violation of the principles of natural justice as outlined in Section 75(4) of the Act.As a result, the Court set aside the impugned order and remanded the matter to the concerned authority for further proceedings in accordance with the law. The Court directed that the authority should complete the proceedings within six months from the date of the order.In summary, the Court allowed the petition in part, emphasizing the importance of adhering to the principles of natural justice and providing a fair opportunity for affected parties to respond before adverse orders are passed.

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