2021 (7) TMI 390 - HC - GST

Validity of orders that were ex parte in nature - no opportunity of hearing provided - violation of principles of natural justice - HELD THAT - This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie , an opinion is formed that the order is bad in law. This is because of 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.

Issues:
1. Quashing of assessment order and demand notice
2. Declaration of statutory provisions as ultra vires
3. Delay in statutory remedy due to COVID restrictions
4. Violation of principles of natural justice in ex parte orders

Analysis:
1. The petitioner sought relief for quashing an order-in-appeal, assessment order, and demand notice related to tax levied for a specific period. The High Court noted the delay in statutory remedy due to COVID restrictions. The Court observed that the order was ex parte in nature and lacked sufficient reasoning, violating principles of natural justice. Consequently, the Court quashed the impugned order and directed the petitioner to deposit a percentage of the total amount for appeal hearing, with additional deposit conditions. The Court also ordered the de-freezing of the petitioner's bank accounts and set guidelines for further proceedings, emphasizing compliance with natural justice principles and refraining from coercive actions during the case's pendency.

2. The petitioner also sought a declaration that certain statutory provisions were ultra vires the Constitution. The Court, despite recognizing the statutory remedy, asserted its authority to intervene when an order is deemed legally flawed. The Court highlighted violations of natural justice and lack of reasoning in the ex parte orders. Consequently, the Court set aside the impugned order and outlined specific conditions for further proceedings, emphasizing compliance with natural justice principles and refraining from coercive actions during the case's pendency.

3. The Court addressed the delay in statutory remedy due to COVID restrictions, acknowledging the petitioner's explanation for the delay. The Court considered the impact of the pandemic on the proceedings and decided to intervene despite the availability of statutory remedies. This intervention was based on the Court's assessment of legal flaws in the ex parte orders, including violations of natural justice principles and lack of reasoning. The Court quashed the impugned order, directed deposit requirements for appeal hearing, and set guidelines for further proceedings to ensure compliance with natural justice principles.

4. The Court highlighted the violation of principles of natural justice in ex parte orders as a significant issue. The Court emphasized the importance of fair opportunity of hearing and sufficient time for representation in legal proceedings. Noting the civil consequences of ex parte orders passed without adherence to natural justice principles, the Court quashed the impugned order and set conditions for further proceedings to ensure compliance with natural justice principles and fair representation for all parties involved. The Court also directed the de-freezing of the petitioner's bank accounts and specified guidelines for the Assessing Authority to follow in deciding the case on merits.

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