Natural justice in GST adjudication: ex parte order set aside for denial of mandatory hearing and remanded for fresh decision.

An ex parte order-in-original under the CGST Act was unsustainable because the taxpayers were not given an effective opportunity of hearing as required by section 75(4). The absence of a personal hearing and the resulting inability to respond before adjudication amounted to breach of natural justice, so the adverse order could not be maintained. The HC set aside the order and remanded the matter for fresh de novo adjudication, with directions to grant a proper hearing and allow reconciliation of the relevant returns.

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Issues: Whether the ex parte order-in-original was liable to be quashed for breach of the mandatory requirement of hearing under section 75(4) of the Central Goods and Services Tax Act, 2017, and whether the matter was required to be remanded for fresh adjudication.

Analysis: The petition challenged the adverse order passed without an effective opportunity of hearing. The record showed that the petitioners did not get a proper chance to respond before the order was made, and the absence of a personal hearing rendered the adjudication procedurally defective. The Court treated the omission as a violation of the principles of natural justice and held that an adverse order could not be sustained where the statutory opportunity of hearing was not afforded. The appropriate course was to set aside the order and require the authority to reconsider the matter after granting a hearing and allowing reconciliation of the relevant returns.

Conclusion: The ex parte order-in-original was quashed and the matter was remanded for fresh de novo adjudication after giving the petitioners an opportunity of hearing.

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