Court mandates fresh adjudication following violation of natural justice principles in GST proceedings.
In a significant judgment, the Delhi High Court has quashed an order imposing substantial tax liability on Avik Televentures Private Limited, citing violations of the principles of natural justice. The division bench, comprising Justices Nitin Wasudeo Sambre and Ajay Digpaul, directed the GST authorities to conduct fresh adjudication, ensuring a fair hearing and adequate time for the petitioner to respond to the allegations.
The dispute arose after the Office of the GST Officer Ward 71 issued a Show Cause Notice to Avik Televentures, alleging non-compliance with tax liabilities and proposing a demand of Rs. 58.02 crore. Despite requests for adjournment, the petitioner was given less than one working day to furnish voluminous documents and prepare for a personal hearing, raising concerns about the fairness of the process.
The court underscored that mere participation in a hearing does not equate to a meaningful opportunity, especially when the timeline for responding is unreasonably truncated. "The opportunity of hearing must be real, reasonable, and effective," the judgment emphasized, criticizing the authorities for failing to afford sufficient time for the petitioner to submit necessary documents and replies.
Furthermore, the court noted the undue haste in passing the Order-in-Original on the same day as the hearing, which confirmed a liability of Rs. 26.72 crore. This rapid adjudication raised legitimate apprehensions regarding the adequate consideration of material placed on record.
While the respondent contended that the availability of an alternate remedy under Section 107 of the CGST Act barred the writ jurisdiction, the court clarified that a violation of natural justice principles overrides such procedural bars.
In light of these findings, the Delhi High Court has remanded the matter for fresh adjudication, instructing the GST authorities to grant a genuine opportunity for Avik Televentures to present its case. The petitioner is scheduled to appear before the respondent authority on April 6, 2026, with all necessary documents and arguments.
This judgment reinforces the judiciary's commitment to upholding natural justice principles, particularly in complex tax disputes, ensuring that taxpayers are given a fair and reasonable opportunity to contest allegations.
Bottom Line:
Principles of natural justice - Opportunity of hearing must be real, reasonable, and effective, especially when additional material is sought by authorities during adjudication proceedings under GST laws.
Statutory provision(s):
Central Goods and Services Tax Act, 2017 Section 75(4), Delhi Goods and Services Tax Act, 2017 Section 75(4), Central Goods and Services Tax Act, 2017 Section 107, Central Goods and Services Tax Act, 2017 Section 66(4), Section 75(5), Section 73(10), Section 161
