Case Summary – Ajayraj Construction Pvt. Ltd. & Anr. v. Commissioner of Central Tax, GST, Delhi East
Court: Delhi High Court
Petition No.: W.P.(C) 4145/2024 & CM Appl. 16942/2024
Judgment Date: 09.05.2024
Relevant GST Provision: Section 75, Section 73/74 CGST Act – principles of natural justice (reply, personal hearing)
Category: Adjudication – SCN decided without considering reply
FACTS (Paras 1–4)
The petitioners assailed the Order-in-Original dated 19.12.2023, by which the show-cause notice dated 28.04.2021 was adjudicated. The impugned order recorded that no written reply was filed by the petitioners and no appearance was made during personal hearings (para 2–3). However, before the High Court, the respondent’s counsel conceded that a reply had indeed been submitted, though it had escaped the notice of the adjudicating authority (para 4).
Thus, the grievance was that the order proceeded ex parte on an erroneous assumption that the taxpayer had not filed any reply.
QUESTIONS FOR DETERMINATION
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Whether the adjudication order suffers from procedural illegality where the adjudicating authority fails to consider a reply that was actually filed.
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Whether the order violates Section 75(4) and (5) of the CGST Act, which require consideration of reply and granting of opportunity of hearing.
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Whether the show-cause notice requires reconsideration ab initio upon acknowledgment of the reply.
COURT’S OBSERVATIONS (Paras 4–6)
The Bench noted the concession of the respondent that the taxpayer’s reply was indeed filed but was not taken into account while passing the order (para 4–5).
It held that the adjudicating authority proceeded on an incorrect factual premise, which strikes at the core of natural justice. The Court found that the principles under Section 75 CGST Act, requiring the authority to consider the taxpayer’s submissions before determination of tax liability, were not adhered to.
The Court emphasised that a fresh adjudication must occur after giving one effective opportunity of personal hearing (para 5).
It further clarified that, should the petitioner again fail to appear, the authority may proceed ex parte, but only after considering the reply already on record (para 6).
JUDGMENT / VERDICT (Paras 5–8)
The High Court set aside the Order-in-Original dated 19.12.2023.
The show-cause notice was restored to the file of the adjudicating authority with a direction to re-adjudicate the case strictly in accordance with law and consider the reply filed by the petitioner (para 5).
The Court clarified that no remarks are made on merits and all rights and contentions are preserved (para 8).
CLASSIFICATION OF THE CASE UNDER GST
Type: Adjudication dispute – violation of natural justice
Statutory Theme: Section 75 CGST Act – consideration of reply & right to personal hearing
Outcome: Order vitiated; matter remanded.
SUMMARY OF CASES REFERRED
(No external cases were cited in the judgment.)
| Case Name | Citation | Principle Laid Down | Relevance |
|---|---|---|---|
| None referenced | – | – | The judgment exclusively turned on the factual lapse of non-consideration of reply. |
BETWEEN FINE LINES – Practical Takeaways for Industry
This judgment reinforces that any adjudication order passed without considering the taxpayer’s reply is void, even if the authority claims non-receipt. Businesses must always maintain acknowledgment evidence of filed replies to prevent wrongful ex-parte orders. Authorities are duty-bound to verify the record before concluding that no reply was filed. If the reply is ignored, the order is liable to be struck down irrespective of the merits of the case.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
