Natural justice in GST adjudication: ex parte demand set aside for denial of reply, with overlapping notices clubbed together.

An ex parte GST adjudication under the CGST Act was set aside because no effective opportunity was given to reply to the show cause notice, and the resulting civil consequences justified remand for fresh consideration after a reply. The High Court also directed that the later notice, which covered overlapping subject matter and was still at the reply stage, be clubbed with the remitted proceedings so both matters could be considered together by the same authority and parallel adjudication avoided.

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Issues: (i) Whether the ex parte order passed under Section 74 of the Central Goods and Services Tax Act, 2017 was liable to be set aside for want of an opportunity to reply to the show cause notice. (ii) Whether the proceeding reflected in the subsequent notice should be clubbed with the remitted show cause notice in view of overlapping subject matter.

Issue (i): Whether the ex parte order passed under Section 74 of the Central Goods and Services Tax Act, 2017 was liable to be set aside for want of an opportunity to reply to the show cause notice.

Analysis: The order was passed without the benefit of any reply from the petitioner and was treated as an ex parte adjudication. In view of the serious civil consequences flowing from the demand, the absence of an effective opportunity to place a reply and supporting material justified interference and remand.

Conclusion: The ex parte order was set aside and the matter was remitted to the stage of reply to the show cause notice.

Issue (ii): Whether the proceeding reflected in the subsequent notice should be clubbed with the remitted show cause notice in view of overlapping subject matter.

Analysis: The later proceeding was still at the stage of reply and the subject matter overlapped with the earlier notice. To avoid parallel adjudication and to enable a composite consideration of the petitioner's response, both notices were directed to be taken up together before the same authority.

Conclusion: The subsequent proceeding was directed to be clubbed with the remitted show cause notice and both were to be pursued together.

Final Conclusion: The writ petition resulted in setting aside the impugned adjudication and a remand for fresh consideration after reply, with the connected notice also brought into the same proceedings.

Ratio Decidendi: An ex parte GST adjudication passed without a reply to the show cause notice may be set aside and remitted when fairness requires an opportunity to respond, and overlapping proceedings may be clubbed to ensure coherent adjudication.

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