HC Slams GST Order Reserved Secretly, Sends Back for Fresh Hearing

In February 2022, the petitioner, which manufactures and sells glass bottles, received a show-cause notice under Section 74(1), alleging that the ITC claim was fraudulent. The petitioner provided a thorough response along with bank statements, GSTR-2A, and tax invoices. On May 10, 2022, however, the respondent authority issued an order confirming the demand and penalty without providing the purported survey report or holding a hearing.

Aggrieved by the said order, an appeal was thereby submitted by the petitioner before the Additional Commissioner. The matter was listed on September 18, 2024, and a judgment was reserved with no indication of when it would be rendered. Without giving the petitioner any additional notice, the decision was finally delivered on September 25, 2024, and the appeal was dismissed. The issue was again challenged before the High Court.

Issue Raised: Can an appellate body under GST reserve and render a decision without providing the taxpayer with advance notice or a hearing?

HC Held: The Hon’ble Court observed that the appellate order neither provided any evidence of notice or hearing on the actual date of decision, nor did it cite any clause allowing for a deferred pronouncement from established position in law. Additionally, this procedure was not supported by the Additional Commissioner’s affidavit.

Thereby, the High Court revoked the appellate order dated 25.09.2024 and remanded the case to the Additional Commissioner (Appeals) to make a new decision after providing all parties with a fair opportunity to be heard and issuing a reasoned ruling within three months of receiving the certified copy.

To Read Full Judgment, Download PDF Given Below.