Calcutta High Court Sets Aside GST Adjudication and Appellate Orders for Improper Notice Communication

The Calcutta High Court has set aside both the adjudication and appellate orders issued under Section 73 of the WBGST/CGST Act, 2017, after finding that the taxpayer was not afforded proper communication of notices and an adequate opportunity to respond. The decision, delivered by Justice Hiranmay Bhattacharyya on 24 July 2026, addresses significant procedural lapses in the manner GST authorities served notices and conducted proceedings.

Background

The petitioner challenged the adjudication order dated 27 January 2025 and the appellate order dated 27 March 2026, both arising from proceedings under Section 73 of the WBGST/CGST Act, 2017. The dispute originated from a show-cause notice issued on 18 November 2024, following scrutiny of the petitioner’s GST returns for the financial year 2020-21. The authorities determined tax, interest, and penalty liability through an ex parte adjudication order.

Core Issue: Communication of Notices

The petitioner contended that the show-cause notice and subsequent reminder were uploaded only in the “Additional Notices and Orders Tab” of the GST portal, rather than the standard “Normal Tab.” As a result, the petitioner claimed to have been unaware of the proceedings and unable to respond or appear for the personal hearing. The petitioner only became aware of the ex parte order upon receiving a recovery letter dated 30 January 2026, after which an appeal was filed along with a request for condonation of delay.

Findings and Legal Reasoning

The Court noted that it was undisputed that the relevant notices and orders were uploaded in the Additional Tab. Referring to established judicial precedent, the Court held that such uploading does not constitute sufficient communication under Section 73 of the WBGST/CGST Act, 2017. The Court further observed that the date fixed for personal hearing was set before the deadline for filing a reply to the show-cause notice, thereby denying the petitioner a fair opportunity to defend against the proposed demand.

These procedural lapses, the Court held, amounted to a violation of the principles of natural justice. The Appellate Authority, in dismissing the appeal as time-barred, failed to consider the sufficient cause shown by the petitioner, particularly the improper communication of notices.

Final Directions and Relief

In light of these findings, the High Court set aside both the adjudication order dated 27 January 2025 and the appellate order dated 27 March 2026. The petitioner has been granted liberty to submit a reply to the original show-cause notice within 14 working days from receipt of the server copy of the order. The adjudicating authority is directed to consider the reply, provide a personal hearing, and pass a fresh, reasoned order within four weeks of receiving the reply.

The Court also clarified that the petitioner may approach the adjudicating authority for a refund of any amount already recovered during the pendency of the proceedings. Any such application is to be considered and disposed of in accordance with law.

Legal Takeaway

This decision underscores the necessity for GST authorities to ensure proper and effective communication of notices through the correct portal channels, as required by law. Failure to do so may render subsequent proceedings and orders vulnerable to challenge on grounds of violation of natural justice. The ruling also reiterates the importance of affording taxpayers a genuine opportunity to respond and be heard before adverse orders are passed.