Natural justice in GST adjudication: ex parte orders were quashed and the matter remitted for fresh notice and hearing.

Ex parte GST adjudication orders passed without effective service of the show-cause notices and without a personal hearing were set aside for breach of natural justice under Section 74 of the CGST Act, 2017. The High Court noted the Department's stand that it would issue a fresh show-cause notice and not act on the impugned orders, so it did not examine the merits of the demand. The matter was remitted for de novo adjudication with a fresh notice, a personal hearing, and a reasoned decision uninfluenced by the earlier orders.

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Issues: Whether the ex parte GST adjudication orders passed without effective service of the show-cause notices and without affording a personal hearing were liable to be quashed, and whether the matter should be remitted for fresh adjudication as de novo proceedings.

Analysis: The challenge was founded on alleged non-service of the show-cause notices and consequential denial of an opportunity to defend, attracting the principles of natural justice in proceedings under Section 74 of the Central Goods and Services Tax Act, 2017. The Department fairly stated that it would issue a fresh show-cause notice and would not act upon the impugned orders. In view of that stand, the Court did not examine the merits of the demand and found it appropriate to restore the matter to the adjudicating authority with directions for a fresh notice, a personal hearing, and a reasoned determination uninfluenced by the earlier orders.

Conclusion: The impugned orders were quashed and set aside, and the adjudication was directed to proceed afresh after issuance of a fresh show-cause notice and grant of personal hearing.

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