Validity of show-cause notice under CGST/DGST Act: impugned order quashed and petitioner granted fresh opportunity to be heard

Validity of a show-cause notice was examined against the statutory mandate in section 6(2)(b) of the CGST/DGST Act; non-compliance with that mandate undermined the impugned proceedings, and the impugned order dated 6 February 2025 was quashed and set aside. The affected party is directed to appear before the issuing authority with written submissions and documents on the specified date, and the authority is to consider the reply and material and grant an opportunity of hearing before passing any fresh order.

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Issues: Whether the impugned show-cause notice and the order dated 6th February 2025 are vitiated for non-compliance with Section 6(2)(b) of the CGST framework by failing to consider the petitioners reply and, if so, whether the order should be quashed and remitted for fresh consideration after affording hearing and consideration of the reply.

Analysis: The petition challenges the impugned proceedings on the ground that the statutory mandate under Section 6(2)(b) was not complied with, specifically that the reply filed by the petitioner was not considered and that penalty aspects were not reflected in the show-cause notice. The Court examined the record of the proceedings, the show-cause notice and the petitioners response, and considered the binding precedent relied upon by the parties. Applying the legal framework under Section 6(2)(b), the Court identified the requirement that the authority must take into account the material placed on record by the party and afford an opportunity of hearing before passing an adverse order. In view of the stated defect in the impugned order and the principle that failure to consider a filed reply and to afford adequate hearing renders an adjudicatory order unsustainable, the Court concluded that limited interference was warranted to secure compliance with statutory mandates and precedent.

Conclusion: The impugned order dated 6th February 2025 is quashed and set aside and the matter is remitted to the authority for fresh decision after affording the petitioner an opportunity to appear, place written submissions and documents, and after due consideration of the petitioners reply; the order of remand is in favour of the assessee.

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