Facts of the Case

  • The petitioner, M/s Jupiter Exports, was issued a demand order dated 25.03.2021 raising liability of ₹6.67 crore.
  • The demand included tax, interest, and penalty for the period April 2018 to March 2019.
  • A show cause notice under Section 74(3) was issued.
  • The petitioner filed a reply and specifically requested a personal hearing.
  • No formal personal hearing was granted; instead, the authority relied on:
    • Telephonic conversation
    • Visit of representatives
  • The order was passed immediately after submission of reply.

Issues Involved

  1. Whether passing an order without granting personal hearing violates Section 75(4) of CGST Act?
  2. Whether telephonic interaction can substitute a statutory personal hearing?
  3. Whether availability of alternate remedy bars writ jurisdiction in such cases?

Petitioner’s Arguments

  • The impugned order was passed in gross violation of natural justice.
  • No opportunity of personal hearing was granted despite written request.
  • The order is non-speaking and ignores submitted documents.
  • Reliance placed on precedents including:
    • Amman Match Company v. Assistant Commissioner of GST
    • BA Continuum India Pvt. Ltd. v. Union of India
  • Circular dated 10.03.2017 mandates multiple hearing opportunities.

Respondent’s Arguments

  • Principles of natural justice are not rigid and depend on facts.
  • Petitioner suffered no prejudice as reply was considered.
  • Telephonic interaction and office visits constituted sufficient hearing.
  • Alternate remedy of appeal available; writ not maintainable.
  • Relied on Supreme Court rulings including:
    • National Highways Authority of India v. Madhukar Kumar
    • A.S. Motors Pvt. Ltd. v. Union of India

Court Findings / Judgment

  • No personal hearing was granted despite statutory requirement.
  • Section 75(4) mandates hearing when:
    • requested in writing
    • adverse order is contemplated
  • Telephonic conversation cannot substitute personal hearing.
  • Principles of natural justice are embedded in statute itself.
  • The adjudicating authority acted in undue haste and failed to consider evidence.
  • Availability of alternate remedy does not bar writ jurisdiction in cases of:
    • violation of natural justice
  • The Court imposed cost on the department for improper conduct.

Court Order

  • Impugned demand order dated 25.03.2021 set aside.
  • Matter remanded for fresh adjudication.
  • Direction to provide proper opportunity of personal hearing.
  • Cost of ₹5,000 imposed on respondent authority.

Important Clarifications by Court

  • Personal hearing is not an empty formality.
  • Telephonic communication ≠ statutory hearing.
  • Statutory procedure must be followed strictly.
  • Writ jurisdiction can be exercised despite alternate remedy where natural justice is violated.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/59524072023CW66732021_200254.pdf

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