Natural justice and reasoned order requirements invalidate a GST penalty order passed without considering objections or granting hearing.

An adjudicatory order under Section 129(3) of the CGST Act affecting civil consequences must address the objections raised and comply with audi alteram partem. Where the authority passes an adverse order without dealing with the petitioner's objections, records no categorical finding on the basis for penalty, and denies a hearing, the order is legally unsustainable. The impugned order was quashed and set aside, and the matter was remanded for fresh consideration after granting an adequate opportunity of hearing and passing a reasoned order in accordance with law.

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Issues: Whether the impugned order under Section 129(3) of the Central Goods and Services Tax Act, 2017 was liable to be quashed for failure to consider the petitioner's objections and for denial of an opportunity of hearing.

Analysis: The order was passed after the petitioner had filed objections, but those objections were not dealt with in the impugned order. No categorical finding was recorded on the reasons for imposing penalty, and the decision rested only on the fact that tax and penalty had been paid. The petitioner was not granted an opportunity of hearing before the adverse order was passed. An adjudicatory order affecting civil consequences must consider the objection raised and comply with the rule of audi alteram partem, which is embedded in the principles of natural justice and reinforced by the requirement of a fair hearing under the statute.

Conclusion: The impugned order was quashed and set aside, and the matter was remanded for fresh consideration after affording an adequate opportunity of hearing and passing a reasoned order in accordance with law.

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