Natural Justice plea fails if hearing opportunity ignored; Pre-deposit mandatory for stay despite Tribunal non-constitution

I. Natural Justice in Second Round of Litigation

Issue

Whether an appellant can claim a violation of natural justice (lack of hearing) in a second round of litigation if they failed to appear for the hearing specifically directed by the High Court in the first round.

Facts

First Round: The appellant had earlier filed a writ petition (WPA 926 of 2024) alleging that the original order was passed without a Show Cause Notice (SCN) or personal hearing. The Court remanded the matter to the Appellate Authority to decide afresh after hearing the parties.
The Compliance: Pursuant to the Court’s order, the Appellate Authority issued a hearing notice granting an opportunity to the appellant.
The Default: The appellant did not appear for the hearing. Consequently, the Appellate Authority passed an order based on the records.
Second Round: The appellant filed a fresh writ petition attacking this new order, again raising the plea of breach of natural justice.

Decision

Opportunity Waived: The High Court held that the matter was in the second round at the instance of the appellant. The Authority had acted as per the Court’s directions by issuing a hearing notice.
No Breach: Since the notice was served and the appellant chose not to appear, the plea of breach of natural justice was not available. One cannot refuse to participate and then claim they were not heard.
Ruling: The challenge on the ground of natural justice failed. [In favour of Revenue]

II. Pre-deposit for Appeal to (Non-existent) Tribunal

Issue

Whether the High Court, while entertaining a writ petition due to the non-constitution of the GST Tribunal, is correct in imposing a pre-deposit condition equivalent to Section 112(8) (typically 20% of the remaining tax) for granting a stay.

Facts

Context: A statutory appeal against the Appellate Authority’s order lies to the GST Tribunal. However, the Tribunal has not yet commenced functioning in West Bengal.
Writ Remedy: To protect themselves from recovery, the appellant filed a writ petition.
Interim Order: The Single Judge granted an interim stay but directed the appellant to make a deposit in terms of Section 112(8) of the CGST Act.
Appellant’s Plea: The appellant challenged this, arguing that earlier payments covered the demand and a further pre-deposit was onerous/unfair.

Decision

Statutory Alignment: The Court held that if the Tribunal were functional, the appeal would be governed by Section 112, which mandates a pre-deposit under sub-section (8) as a precondition for filing.
Discretionary Relief: When exercising writ jurisdiction in the absence of the Tribunal, the Court’s discretion regarding interim relief should align with the statutory scheme. Imposing the statutory pre-deposit amount is not “perverse” or “without jurisdiction.”
No Double Payment: The argument of double payment arises only if the assessment is conclusively found incorrect later. On the face of the record, the condition was lawful.
Ruling: The interim direction for pre-deposit was sustained. [In favour of Revenue]

Key Takeaways

Show Up or Shut Up: If a Court remands your case for a fresh hearing, failing to attend that hearing is fatal. You cannot claim “violation of natural justice” a second time if you ignored the opportunity given.

No Free Stay: The non-constitution of the GST Tribunal does not mean taxpayers get an automatic, unconditional stay on recovery. Courts will typically ask you to pay the 20% pre-deposit (Section 112(8)) that you would have paid to the Tribunal, as a condition for the stay order.

HIGH COURT OF CALCUTTA

Mphasis Engineers Co-operative Contract and Construction Society Ltd.

Senior Joint Commissioner, State Tax

Debangsu Basak and MD. SHABBAR RASHIDI, JJ.

MAT 86 of 2025
IA No. CAN 1 of 2025

NOVEMBER 19, 2025

Prosenjit Das and Debanjan Das, Advs. for the Appellant. Pretom Das and Ms. Rima Sarkar, Advs. for the Respondent.

ORDER

Debangsu Basak, J.- Appeal is at the behest of an assessee and directed against order dated August 19, 2025 passed in WPA 1608 of 2025.

2. By the impugned order, learned Single Judge invoked the provisions of Section 112 of the WBGST/CGST Act, 2017.

3. Learned Advocate appearing for the appellant submits that, there is a issue of jurisdiction with regard to the authorities invoking the provisions of the Act, 2017 on such point. He submits that, no show-cause notice was issued. Therefore, the assumption of jurisdiction was incorrect.

4. On merits, learned Advocate appearing for the appellant submits that, appellant already deposited amount which is presently sought to be claimed. According to him, requiring the appellant to make a pre-deposit for the purpose of filing the appeal would be onerous and is unfounded.

5. In support of his contentions, learned Advocate appearing for the appellant relies upon Jai Venktesh Concast (P.) Ltd. v. Deputy Commissioner of State Tax (Calcutta)/(2024) 122 GSTR 59and the order dated March 21, 2025 passed by the Hon’ble Supreme Court in Central Board of Indirect Taxes and Customs v. Aberdare Technologies (P.) Ltd. (SC)/Special Leave Petition (Civil) Diary No.6332/2025.

6. Learned Advocate appearing for the appellant submits that, the Tribunal contemplated under the provisions of WBGST/CGST Act, 2017 is yet to be constituted. Therefore, the appellant is entitled to file and maintain the writ petition.

7. Respondents authorities are represented.

8. We are considering an appeal directed against an interim order passed in a writ petition filed at the behest of the appellant.

9. This is the second round of litigation at the behest of the appellant.

10. First round of litigation was at the behest of the appellant by way of a writ petition being WPA 926 of 2024 which was disposed of by the High Court.

11. The issue with regard to personal hearing and show-cause notice were gone into in the earlier round of litigation. At least it is deemed to be so. The appellate authority was required to be considered the issues afresh after hearing the parties, by the High Court. The appellate authority did so.

12. Therefore, in our view, the issue of breach of principles of natural justice is no longer available. It appears from the order impugned in the writ petition passed by the appellate authority that, such principles were adhered to. Notice of hearing was given. The appellant chose not to appear before the appellate authority.

13. Under the provisions of the Act, 2017, the order impugned in the writ petition filed by the appellant is appealable to the Tribunal established thereunder. The Tribunal under the Act, 2017 is yet to commence functioning in the State of West Bengal.

14. In the event, the appellant filed an appeal to the Tribunal under the provisions of the Act of 2017, such appeal would be governed by the provisions of Section 112 of the Act of 2017.

15. Sub-section (8) of Section 112 of the Act of 2017 mandates a pre-deposit for an appeal to be filed before the Tribunal. In fact, it specifies that no appeal shall be filed until conditions of pre-deposit as specified thereunder are made.

16. In the facts of the present case, learned Single Judge exercised discretion by the impugned order by directing the appellant to put in the money in terms of Section 112 of the Act of 2017.

17. Exercise of discretion, in an interim order, is not to be readily interfered with in appeal unless it is established that the interim order is perverse or passed without jurisdiction or in breach of principles of natural justice.

18. In the facts of the present case, there is an issue with regard to collection of revenue from the appellant. Therefore, the discretion exercised by the learned Judge which in our view in terms of Section 112 of the Act of 2017 cannot be said to be irregular exercise or perverse. Appellant was heard. Impugned order was passed in the writ petition of the appellant. Lack of jurisdiction of the learned Single Judge is not established.

19. The Coordinate Bench in Jai Venktesh Concast Private Limited (supra) waived the requirement of pre-deposit in filing the writ petition after “considering the peculiar facts and circumstances” of that case. The “peculiar facts and circumstances” of that case, however, does not appear from the body of the judgment.

20. M/s Aberdare Technologies Private Limited (supra) directs the Central Board of Indirect Taxes and Customs to re-examine the provisions/timelines fixed for correcting the bona fide errors. In the facts of that case, the Hon’ble Supreme Court was of the prima facie view that there was double payment.

21. Issue in the writ petition directed against the order of the appellate authority, is whether or not the appellant is liable to pay the tax assessed. Issue of double taxation, or excess payment, if at all, will be assessed on a conclusive finding that the assessment order upheld in appeal, is incorrect. Till such issue is settled finally, the question of double taxation or excess payment does not arise. At least, double taxation or excess payment does not appear on the face of the record.

22. In such circumstances, we find no ground to interfere with the order impugned.

23. MAT 86 of 2025 and IA No.: CAN 1 of 2025 are disposed of without any order as to costs.

24. I agree.