Mandatory personal hearing before adverse GST adjudication required; ex parte demand orders were quashed for breach of natural justice.

Adjudication orders passed on the first date fixed for compliance without an effective opportunity of hearing were in breach of the mandatory hearing requirement under the Jharkhand GST Act and the principles of natural justice. The High Court applied its earlier interpretation that a personal hearing is required before any adverse ex parte determination and that adjournment may be granted for sufficient cause. The adjudication orders and summaries of demand were quashed and set aside, with liberty to initiate fresh proceedings in accordance with law.

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Issues: Whether the adjudication orders passed under the Jharkhand Goods and Services Tax Act, 2017 were liable to be quashed for want of personal hearing and for violation of the mandatory requirements governing adjudication.

Analysis: The writ petitions arose from adjudication orders passed on the very first date fixed for compliance to the show cause notices. The record showed that no effective opportunity of hearing was granted before ex parte determination, despite the statutory mandate that a hearing must be afforded where an adverse decision is contemplated and that adjournment may be granted for sufficient cause. The Court noted its earlier interpretation of these provisions, under which the right to hearing before adverse adjudication is mandatory, and found that the State tax authorities had again acted in disregard of that settled position. The proceedings were therefore held to be in clear breach of the principles of natural justice and contrary to the governing provisions.

Conclusion: The adjudication orders and summaries of demand were quashed and set aside, and the petitions were allowed with liberty to the respondents to initiate fresh proceedings in accordance with law.

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