Series Of Laches On Part Of GST Dept. In Handling The Matter: Calcutta HC

The Calcutta High Court took a “very dim view” of what it described as a series of lapses by the GST authorities, holding that the proceedings against the assessee were vitiated by violations of statutory safeguards and principles of natural justice. The bench of Justice Om Narayan Rai observed that the show cause notice was “clearly bereft of particulars,” reiterating that it is a settled position of law that all relevant details must be furnished to enable the noticee to effectively answer the charges. The failure to provide such particulars, the Court held, amounted to a breach of natural justice. The bench held that the adjudication order impugned dated May 29, 2023 is wholly unreasonable and is, therefore, in abject violation of the provisions of Section 75(6) of the said Act of 2017. It is not in dispute that the said order which clearly visits the petitioner with adverse consequences has been passed without hearing the petitioners which is a clear violation of the provisions of Section 75(4) of the said Act of 2017 apart from the violation of principles of natural justice even in usual course. On that ground too the adjudication order cannot withstand scrutiny under judicial review. The bench stated that the second repetition of the same adjudication order on June 05, 2023 was clearly without authority. Similarly the order dated June 09, 2023 communicating acceptance of the petitioner’s reply could also not have been issued by the Proper Officer concerned at all inasmuch as the Proper Officer became functus officio after having passed the adjudication order dated May 29, 2023. Both the orders are without jurisdiction. The matter arose from a show cause notice dated February 21, 2023 issued to the petitioner alleging excess ITC claim. However, the notice merely contained a chart reflecting the alleged tax liability without detailing the factual basis or grounds for the proposed demand. Despite the petitioner filing a reply on March 9, 2023, the adjudicating authority passed an order dated May 29, 2023 under Section 73 of the GST Act confirming the demand. Notably, this order also lacked factual narration and reasoning, containing only tabulated tax figures. Subsequently, another order dated June 5, 2023 — reflecting the same demand amount — was uploaded on the GST portal. Strikingly, on June 9, 2023, yet another communication was uploaded stating that the petitioner’s reply had been found satisfactory and that no further action was required. However, on January 29, 2024, a sum of ₹2,51,858 was debited from the petitioner’s electronic credit ledger based on the June 5, 2023 adjudication order, prompting the writ petition before the High Court. The Court took serious exception to what it described as a “series of laches” on the part of the GST authorities. Allowing the writ petition, the Court set aside the adjudication orders dated May 29, 2023 and June 5, 2023; quashed the communication dated June 9, 2023 and directed the GST authorities to reverse and re-credit ₹2,51,858 debited from the petitioner’s electronic ledger within two weeks. The court permitted the authorities to issue a fresh, detailed show cause notice with all relevant particulars, granting the petitioner an opportunity to respond in accordance with law. Case Details Case Title: Pharma Trading Corporation and Anr. Vs. The State of West Bengal &Ors. Citation: JURISHOUR-133-HC-2026(Cal) Case No.: WPA 21671of 2025 Date: 25/02/2026 Counsel For Petitioner: Himangshu Kumar Ray, Adv. Counsel For Respondent: Sumita Shaw, Adv. Click Here To Read Order Read More: Thinking To File RTI Application To Know Your Spouse’s Income? Don’t Before Knowing This

Series Of Laches On Part Of GST Dept. In Handling The Matter: Calcutta HC

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