Order set aside for violating Rule 142 CGST Rules; petitioner must get fair hearing under Section 73 CGST Act

The HC found that the impugned order was passed ex parte in violation of natural justice due to non-compliance with Rule 142 of the CGST Rules, 2017, and gross procedural irregularity in electronic service of notice. Although electronic service under the GST regime is generally valid, the Court held that fairness and the nature of the case required the petitioner be given a proper opportunity to be heard. The matter was remitted to the stage of issuance of notice under Section 73 of the CGST Act. The petitioner was directed to appear before the Assessing Authority on the fixed date and participate in the proceedings. The petition was allowed by way of remand.

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The Karnataka High Court, in Writ Petition No. 13437 of 2025, quashed the impugned order dated 20-12-2023 passed under Section 73 of the Central Goods and Services Tax Act, 2017, on grounds of "gross procedural irregularity" and violation of the principles of natural justice, specifically non-compliance with Rule 142 of the CGST Rules, 2017. The Court held that the order was passed ex-parte without affording the petitioner, a registered fireworks dealer, a reasonable opportunity of being heard, thereby breaching the audi alteram partem rule. Although electronic service of notices under the GST regime is generally upheld, the Court found that in the present case, relying solely on electronic communication via the GST portal was insufficient given the substantive rights involved and the nature of the business. Consequently, the Court remitted the matter to the Adjudicating Authority for fresh adjudication after issuing proper notice under Section 73 and providing the petitioner an effective opportunity to participate. The petitioner was directed to appear on 15.07.2025 and to pay costs of Rs. 10,000 to the Registrar General within two weeks. The Court emphasized that the writ petition was maintainable despite the availability of alternative remedies, as the impugned order lacked due process.

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