2021 (8) TMI 1067 - HC - GST

Violation of principles of natural justice - fair opportunity as well as sufficient time of hearing not provided - ex-parte assessment order passed - HELD THAT - This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, we form an opinion that the order is bad in law. This is for two reasons- (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order of assessment passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences. Petition disposed off.

Issues:
1. Quashing of ex-parte order dated 31.01.2020 and summary order under Bihar GST Rules, 2017.
2. Rejection of appeal on grounds of delay.
3. Allegations of violation of principles of natural justice.
4. Legality of recovery action by respondent.
5. Coercive recovery restraint during pendency of writ application.
6. Refund of recovered amount.
7. Interference by the Court despite statutory remedy.

Analysis:

1. The petitioner sought a writ for quashing an ex-parte order and a summary order under the Bihar Goods and Services Tax Act, 2017. The High Court noted that the petitioner's bank account was attached post the impugned orders. The Court found that the order was bad in law due to a lack of fair opportunity of hearing and insufficient reasoning for determining the amount due. Consequently, the Court quashed the impugned orders and the appellate order rejecting the appeal on grounds of delay.

2. The rejection of the appeal by the respondent on the grounds of delay was a crucial issue. The Court, despite the availability of statutory remedies, intervened due to the violation of principles of natural justice and the civil consequences of the ex-parte order. The Court emphasized the importance of fair opportunity of hearing and set aside the orders based on these grounds.

3. The petitioner alleged that the impugned order was highly cryptic, misconceived, and violated natural justice principles. The Court agreed with the petitioner's contention, highlighting the inadequacy of time afforded for representation and the lack of sufficient reasons in the ex-parte assessment order. This violation of natural justice principles led the Court to quash the orders.

4. The legality of the recovery action taken by the respondent was challenged by the petitioner. The Court held that the action for recovery of tax, interest, and penalty was illegal and without jurisdiction as it did not comply with the conditions mandated by the Act. The Court directed the defreezing and de-attaching of the petitioner's bank accounts immediately.

5. The petitioner requested a restraint on coercive recovery during the pendency of the writ application. The Court granted this relief and directed the petitioner to deposit a certain amount as a condition for hearing the appeal, with further deposits subject to the Assessing Officer's order.

6. Regarding the refund of the amount already recovered, the Court directed the petitioner to cooperate in the proceedings and not seek unnecessary adjournments. The Assessing Officer was instructed to pass a fresh order after affording adequate opportunity to all parties.

7. Despite the availability of statutory remedies, the Court intervened due to the glaring issues of violation of natural justice and lack of reasoning in the ex-parte order. The Court left all issues open for further adjudication and reserved liberty for the parties to challenge the order or seek other remedies as per the law.

This detailed analysis covers the issues raised in the judgment and the Court's comprehensive response to each concern presented by the petitioner.

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