Department cannot pass adverse orders without reasonable opportunity of hearing

[CA Bimal Jain]

The Hon’ble Delhi High Court passed a common order in the case of MOHINDER KUMAR VERSUS PR. COMMISSIONER OF DELHI GOODS AND SERVICES TAX & ORS. - 2024 (9) TMI 1003 - DELHI HIGH COURT held that an Adjudicating Authority shall not pass any adverse order against any of the Petitioners without affording them a reasonable opportunity to be heard.

Facts:

The common issue that arose in these batch of petitions was that the orders passed under Section 73 of the Central Goods & Services Tax Act, 2017 (“the CGST Act”) which were impugned in these petitions were unreasoned and were passed without considering the response submitted by the Petitioners to their respective Show Cause Notices (“SCNs”). Further, these impugned orders were issued during the last three days prior to the expiry of period of limitation for passing the said orders for the financial years 2017-18 and 2018-19 and were called upon to furnish the details of orders that were passed during the last few days of the extended period of limitation.

One of the common features of the impugned orders is that they merely reproduce the tabular statement of the demand proposed in the respective SCNs and affirm the same by rejecting the response of the taxpayer as unsatisfactory.

Hence, the Petitioners filed a writ petition before the Delhi High Court.

Issue:

Whether the Department can pass adverse orders without reasonable opportunity of hearing?

Held:

The Hon’ble Delhi High Court in MOHINDER KUMAR VERSUS PR. COMMISSIONER OF DELHI GOODS AND SERVICES TAX & ORS. - 2024 (9) TMI 1003 - DELHI HIGH COURT  held as under:

• Held that, the adjudicating authority shall not pass any adverse order against any of the Petitioners without affording them a reasonable opportunity to be heard. Further, all rights and contentions of the Petitioners are reserved, and the disposal of the present petitions would not preclude them from raising such contentions as advised including those that may have been raised in the present petitions.

Our Comments:

The Hon’ble Supreme Court in the case of M/S DAFFODILLS PHARMACEUTICALS LTD. & ANR. VERSUS STATE OF U.P. & ANR. - 2019 (12) TMI 1520 - SUPREME COURT held that no one can be inflicted with an adverse order, without being afforded a minimum opportunity of hearing and quashing an order passed by Uttar Pradesh Government directing its Medical and Health Department to stop local purchase.

 (Author can be reached at [email protected])