Calcutta High Court Quashes Ex Parte GST Order Over Taxpayer's Non-Appearance Due To Consultant's Illness

The Calcutta High Court set aside an ex parte order of the GST appellate authority passed due to non-appearance caused by the illness of the taxpayer's authorised consultant. It stressed that taxpayers cannot be penalised for circumstances beyond their control.

A Single Judge Bench of Justice Om Narayan Rai held that the appellate authority failed to grant the taxpayer a fair and reasonable opportunity of hearing, and remanded the matter for fresh adjudication.

The dispute arose from an appeal filed by Chatterjee Concern, a partnership firm, challenging an adjudication order passed under the West Bengal GST Act and the Central GST Act, which had held the firm liable for excess availment of input tax credit, along with interest and penalty.

On the date fixed for hearing, the taxpayer remained unrepresented. A supplementary affidavit placed before the Court disclosed that the firm's tax consultant, who was responsible for appearing before the appellate authority, was seriously ill and undergoing treatment for prostate cancer during the relevant period.

Despite this explanation, the appellate authority proceeded to dismiss the appeal ex parte and further enhanced the penalty from Rs. 1,000 to Rs. 10,000 without granting the taxpayer an opportunity of hearing.

After examining the material on record, including the medical documents, the Court held that the principles of natural justice had not been fairly complied with. It observed:

“It may not be unreasonable to believe that such person missed to attend the appeal hearing… when the appellate authority has increased the quantum of penalty, it was incumbent on the appellate authority to afford the petitioners a reasonable opportunity of showing cause against the proposed enhancement of penalty.”

The Court concluded that the appellate authority ought to have afforded the taxpayer a reasonable opportunity of hearing, especially before enhancing the penalty.

Accordingly, the appellate order was set aside and the matter remanded to the appellate authority for fresh adjudication.

For Petitioner: Himangshu Kumar Ray, Subhasis Podder, Sushant Bagaria, Gaurav Chakrborty

For Respondent: Swapan Kumar Dutta, Tanoy Chakraborty, Saptak Sanyal