2022 (7) TMI 447 - HC - GST

Rejection of appeal preferred by the petitioner under section 107 of the central goods and services tax act 2017 - opportunity of haring not provided - ex-parte order - violation of principles of natural justice - HELD THAT - This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, it is opined 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 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; (c) It is also found that the authorities not to have adjudicated the matter on the attending facts and circumstances. All issues of fact and law ought to have been dealt with, even if the proceedings were ex parte in nature. Petition disposed off.

Issues:
1. Quashing of orders under the central goods and services tax act 2017 and Bihar Goods And Services Tax Act 2017.
2. Violation of principles of natural justice in passing ex parte orders.
3. Interference by the Court in cases of orders bad in law.
4. Relief sought against coercive action for tax recovery.
5. Interpretation of input tax credit provisions.
6. Remand of the case to the Assessing Authority for fresh decision.
7. Conditions imposed on the petitioner for further proceedings.

Analysis:

1. The petitioners sought relief for quashing various orders under the central goods and services tax act 2017 and Bihar Goods And Services Tax Act 2017. The High Court found that the orders were passed in violation of principles of natural justice as they were ex parte in nature. The Court emphasized the importance of fair opportunity of hearing and the need for sufficient reasons in determining the amount due and payable by the assessee.

2. Despite the statutory remedy available, the Court decided to interfere in the matter due to the clear violation of principles of natural justice. The Court highlighted that the orders passed ex parte did not provide adequate reasons and failed to address all issues of fact and law. As a result, the Court quashed the impugned orders and set aside the summary of order issued under the central goods and services tax rules 2017.

3. The Court disposed of the petition on the grounds of violation of natural justice and lack of sufficient reasoning in the orders. It directed the case to be remanded to the Assessing Authority for a fresh decision, ensuring that all parties are given a fair opportunity to present their case. The Court also ordered that no coercive steps should be taken against the petitioner during the pendency of the case.

4. The Court imposed certain conditions on the petitioner for further proceedings, including the deposit of a certain percentage of the total amount and additional deposit before the Assessing Officer. The Court also directed the de-freezing of the petitioner's bank accounts and set a date for the petitioner to appear before the Assessing Authority.

5. The Court emphasized the importance of complying with the principles of natural justice and providing a fair opportunity for all parties to present essential documents and materials. It instructed the Assessing Authority to decide the case on merits expeditiously and pass a speaking order with reasons assigned, ensuring a copy is supplied to all parties.

6. The Court reserved liberty for the petitioner to challenge the order if required and desired, as well as for parties to take recourse to other available remedies in accordance with the law. It expressed hope for the timely resolution of any further legal actions and left all issues open for future consideration.

7. The Court concluded the judgment by emphasizing the need for digital proceedings during the pandemic and disposed of the petition along with any interlocutory applications. The respondents were tasked with communicating the order to the appropriate authority through electronic means.

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