2024 (4) TMI 161 - HC - GST

Validity of the Order-in-Original - Adjudication of show cause notice - adjudication was not fair - No opportunity to raise preliminary objections - prayer for amendment of the Petition for incorporating the additional prayer - HELD THAT - We are of the clear opinion that there is much substance in the contentions as urged on behalf of the Petitioner that the adjudicating officer ought to have granted an opportunity to the Petitioner to raise all contentions in the course of adjudication in the event he intended to decide the Show Cause Notice and not the preliminary objections. In such situation, the Petitioner could not have been taken unaware of the intentions of the adjudicating officer. There cannot to be any vagueness in the course of quasi-judicial adjudication and by taking a party by surprise on what would be actually adjudicated, more particularly, when there was a High Court Order. To undertake a quasi-judicial adjudication is a solemn exercise which needs to be fulfilled with fairness and having all attributes of judicial adjudication. We may observe that the Order dated 1st December, 2023 passed by this Court was clear to the effect that, on 5th December, 2023, the Petitioner would raise before the adjudicating officer its preliminary objections, it was such issue which was expected to be decided. Significantly, on the backdrop of the Court s Order dated 1st December, 2023, the Petitioner was not put to a specific notice that, apart from the preliminary objections, the show cause notice itself would be taken up for consideration and would be decided. The hearing on the preliminary objections took place on 5th December, 2023, sans a faintest idea to the Petitioner that a final order on the show cause notice would be passed. Further, no opportunity to place on record the relevant documents was granted to the Petitioner, nor the same could be raised for want of the Petitioner s knowledge that the show cause notice itself is being taken up for decision much less on the ground, that the show cause notice needs to be decided by 31st December, 2023, failing which, it would be barred by limitation. Considering the well settled principles of law in regard to quasi-judicial adjudication necessarily a fair and proper opportunity was required to be made available to the Petitioner and a clear notice, that final adjudication on the Show Cause Notice was to be held, should have been provided. Thus, we are of the opinion that the impugned Order-in-Original deserves to be quashed and set aside and the proceedings remanded to the adjudicating officer for deciding all the issues, including the preliminary objections, by a fresh order to be passed. Ordered accordingly. Petition stands disposed of in the aforesaid terms.

Summary

Issues involved: Challenge to show cause notice u/s Article 226 of the Constitution of India, violation of procedural rules in adjudication process.

Summary:

Challenge to Show Cause Notice:
The petitioner challenged a show cause notice issued by Respondent No. 1, seeking various reliefs including a declaration that the notice was ultra vires certain sections of the CGST Act. The court allowed the petitioner to raise preliminary objections regarding the notice, which were to be considered separately from the main adjudication. However, the adjudicating officer proceeded to decide the show cause notice itself, leading to the petitioner filing additional prayers to set aside the Order-in-Original. The petitioner argued that the adjudication was unfair as it did not follow the court's order to first decide the preliminary objections. The court agreed with the petitioner, stating that the adjudicating officer should have granted an opportunity to raise all contentions before deciding the show cause notice. The impugned Order-in-Original was quashed, and the proceedings were remanded for a fresh order to be passed after allowing the petitioner to submit relevant documents.

Violation of Procedural Rules:
The court noted that the adjudicating officer failed to provide a clear notice that final adjudication on the show cause notice would take place, as required in quasi-judicial adjudication. The petitioner was not given the opportunity to present relevant documents, and there was a lack of communication regarding the intention to decide the show cause notice. The court emphasized the importance of fairness and proper procedure in adjudication and criticized the department for overlooking the court's order. Consequently, the impugned Order-in-Original was set aside, and the proceedings were remanded for a fresh decision after granting the petitioner a fair opportunity to present their case.