2023 (4) TMI 401 - HC - GST

Violation of principles of natural justice - ex-parte order - fair opportunity of hearing not provided - rejection of input tax credit claim - 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. - Matter restored back with directions. Petition disposed off.

Summary

Issues:
Challenging order under Bihar Goods and Services Tax Act, 2017 for Financial Years 2017-18 and 2018-19; Rejection of input tax credit claim without proper notice; Violation of principles of natural justice; Ex parte order lacking sufficient reasons; Interference by the Court despite statutory remedy.

Analysis:
The petitioner sought relief against the order passed by the Respondent No. 2 under the Bihar Goods and Services Tax Act, 2017 for the Financial Years 2017-18 and 2018-19. The petitioner alleged that the order was contrary to the principles of natural justice as it did not consider the issues adequately. The Court noted that the input tax credit claim was rejected without further notice to the petitioner, leading to the imposition of tax, interest, and penalty. The Revenue's counsel agreed to remand the matter for fresh assessment by the Assessing Authority, ensuring a fair decision based on merits and refraining from coercive actions during the case's pendency.

The Court, after hearing both parties and examining the record, found that it could intervene if an order appeared legally flawed on its face. The Court identified two key reasons for interference: the violation of natural justice principles, specifically the lack of a fair hearing opportunity, and the ex parte nature of the order without clear reasons for determining the amount due from the assessee. Emphasizing that such orders have civil consequences, the Court decided to dispose of the writ petition based on mutually agreeable terms.

The Court's decision included quashing the impugned order, requiring the petitioner to deposit a portion of the demand raised, directing the de-freezing of the petitioner's bank accounts, and scheduling an appearance before the Assessing Authority. The Assessing Authority was instructed to handle the case on merits, ensuring procedural fairness, and providing opportunities for all parties to present essential documents. The Court also mandated expedited decision-making, separate orders for each year, and reserved rights for further challenges or remedies, maintaining neutrality on the merits of the case.

The Court emphasized cooperation, timely proceedings, and digital mode facilitation if possible. The judgment concluded by leaving all issues open, encouraging adherence to legal procedures, and expressing hope for prompt resolution in subsequent legal actions. The petition was disposed of along with any related interlocutory applications, with the respondents tasked with communicating the order electronically to the appropriate authority.