2022 (1) TMI 1457 - HC - GST

Levy of interest on gross amount without deducting the Input Tax Credit which is already paid by the petitioner - non-issuance of SCN - 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. The impugned orders dated 10.08.2021 (Annexure-2 series) passed by the Respondent No. 4 namely the Additional Commissioner of State Taxes (Appeal), Patna West Division, Patna in different appeals (Annexure-2 series), and the orders dated 25.02.2020 passed by Respondent No.5, namely The A.C.S.T., Danapur Circle, Danapur, district Patna for different tax periods in Form GST DRC-07 set aside - petition disposed off.

Summary

Issues:
Challenging imposition of interest without deduction of Input Tax Credit, rejection of appeals without proper consideration, restraining coercive action, violation of natural justice principles.

Analysis:

The petitioner sought relief to quash the summary order imposing interest without deducting Input Tax Credit, and to challenge the rejection of appeals without proper consideration. The Court noted the violation of natural justice principles due to insufficient time for the petitioner to present their case and the lack of reasons in the ex parte order. Despite statutory remedies, the Court intervened as the order was deemed bad in law. The Court quashed the impugned orders and directed the petitioner to deposit a percentage of the total amount for appeal hearing, with additional deposits required before the Assessing Officer. The bank accounts were to be unfrozen, and the petitioner was required to appear before the Assessing Authority. The case was to be decided on merits with full opportunity for both parties to present their case and submit essential documents. No coercive steps were to be taken during the case, and a speaking order with reasons was mandated to be provided to the parties. The petitioner was given liberty to challenge the order if needed, and all issues were left open for further review. The Court emphasized expeditious handling of the case, preferably within two months, and proceedings were recommended to be conducted digitally during the pandemic. The judgment was concluded with the disposal of the petition and related applications, with the respondents tasked to communicate the order electronically to the appropriate authority.