2021 (7) TMI 228 - HC - GST

Principles of Natural Justice - Seeking withdrawal of assessment order - valid return along with the requisite taxes was filed - seeking withdrawal of consequential Composite Notice to Third Person - 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 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.

Summary

Issues Involved:
Petitioner's prayer to withdraw assessment order and consequential notice, violation of natural justice, interference by the Court despite statutory remedy, disposal of the writ petition on mutually agreeable terms.

Analysis:
The petitioner sought relief from the High Court to withdraw the assessment order and consequential notice issued under the Bihar Goods and Services Tax Act, 2017. The Court noted that the Revenue argued the petitioner had an alternative remedy of filing an appeal under the Act. However, the Court asserted its authority to intervene if it found the order to be legally flawed, especially due to violations of natural justice and lack of proper reasoning in determining the amount due from the assessee. The Court emphasized that orders passed ex parte with civil consequences must adhere to principles of natural justice. Consequently, the Court disposed of the writ petition based on mutually agreeable terms.

The High Court proceeded to quash the impugned assessment order and consequential notice, highlighting the lack of proper reasoning and violation of natural justice. The Court accepted the petitioner's statement regarding the deposit required for hearing the appeal and directed additional deposit of ten percent of the demand raised before the Assessing Officer within four weeks. This deposit was to be without prejudice to the parties' rights and subject to the Assessing Officer's order. The Court also ordered the defreezing/de-attaching of the petitioner's bank account(s) related to the proceedings immediately.

Furthermore, the Court directed the petitioner to appear before the Assessing Officer, cooperate in the proceedings, and not seek unnecessary adjournments. It stressed affording adequate opportunity to all concerned parties, including the petitioner, for a fresh order. The Assessing Officer was instructed to decide the matter expeditiously, ideally within two months from the petitioner's appearance. The Court reserved liberty for the petitioner to challenge the order and for parties to pursue other available remedies. It emphasized dealing with such remedies promptly and in accordance with the law.

The judgment concluded by leaving all issues open, expressing hope for expedited resolution when taking recourse to remedies, especially during the pandemic. It specified conducting proceedings through digital mode if possible and disposed of the petition along with any interlocutory applications. The respondents' counsel was tasked with communicating the order electronically to the appropriate authority.