2023 (3) TMI 789 - HC - GST

Validity of order issued u/s 73(9) with DRC-07 - Violation of principles of natural justice - opportunity of hearing not provided (audi alterem partem) - ex-parte order - Condonation of delay in filing appeal - appeal rejected on the ground of limitation after finding a delay of two month - rejection of Input Tax Credit Claim by the petitioner in Form GSTR3B - HELD THAT - This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, form an opinion that the order is bad in law. This we say so, 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) Also the authorities not to have adjudicated the matter on the attending facts and circumstances. Petition disposed off.

Issues involved:
1. Setting aside orders related to rejection of appeal and imposition of tax, interest, and penalty.
2. Releasing the petitioner's bank account.
3. Violation of principles of natural justice in passing orders.
4. Remanding the matter to the Assessing Authority for fresh decision.
5. Affording opportunity for hearing and deciding the case on merits.
6. Directing de-freezing/de-attaching of the bank account.
7. Providing liberty to challenge the order and take other legal remedies.

Detailed Analysis:

1. Setting aside orders related to rejection of appeal and imposition of tax, interest, and penalty:
The petitioner sought writs to set aside orders rejecting their appeal and imposing tax, interest, and penalty. The High Court found that the orders were passed in violation of natural justice principles, as the petitioner was not given sufficient time for representation. The orders did not provide adequate reasons for determining the amount due, and the authorities failed to consider all relevant facts and circumstances. Consequently, the Court quashed the impugned orders and directed the Assessing Authority to decide the case afresh.

2. Releasing the petitioner's bank account:
The petitioner requested the release of their bank account. The Court directed the immediate de-freezing/de-attaching of the bank account, if it had been attached in relation to the proceedings under consideration. This action was taken without prejudice to the rights and contentions of the parties, ensuring the petitioner's access to their funds.

3. Violation of principles of natural justice in passing orders:
The Court emphasized the importance of adhering to principles of natural justice in legal proceedings. It noted that the orders in question were passed ex parte without providing the petitioner with a fair opportunity to present their case. Lack of sufficient reasoning and failure to consider all aspects of the case led the Court to intervene and set aside the orders based on these grounds.

4. Remanding the matter to the Assessing Authority for fresh decision:
Despite the statutory remedy available, the Court decided to interfere due to the glaring issues in the orders passed. The matter was remanded to the Assessing Authority for a fresh decision, ensuring that the case would be heard on its merits and all parties would have an opportunity to present essential documents and materials.

5. Affording opportunity for hearing and deciding the case on merits:
The Court directed the Assessing Authority to provide a fair opportunity for all parties to present their case and to decide the matter on its merits. It stressed the importance of complying with the principles of natural justice, ensuring that the proceedings are conducted transparently and all relevant factors are taken into account.

6. Directing de-freezing/de-attaching of the bank account:
In line with the petitioner's request, the Court ordered the immediate de-freezing/de-attaching of the petitioner's bank account if it had been previously attached in connection with the ongoing legal proceedings. This step was taken promptly to restore the petitioner's access to their bank account funds.

7. Providing liberty to challenge the order and take other legal remedies:
The Court granted liberty to the petitioner to challenge the order if necessary and desired. It also allowed both parties to pursue other legal remedies available to them in accordance with the law. This provision ensured that the parties had the freedom to seek further legal recourse if they deemed it necessary.

By addressing the issues raised by the petitioner comprehensively and ensuring a fair and just resolution, the High Court's judgment upheld the principles of natural justice and provided a clear roadmap for the parties to proceed with the case in a manner that respects their legal rights and obligations.

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