2021 (9) TMI 155 - HC - GST

Validity of Ex-parte order passed u/s 74 - Violation of principles of natural justice - fair opportunity of hearing not provided - ex-parte order - 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. Order set aside - Matter remanded back - Petition disposed off.

Summary

Issues:
1. Rejection of appeal on the grounds of being barred by limitation.
2. Violation of principles of natural justice and lack of sufficient reasons in the ex parte order.

Analysis:
1. The petitioner had appealed against the order passed by the Deputy Commissioner of State Tax, which was rejected on the grounds of being time-barred. The High Court acknowledged the delay in filing the appeal due to COVID restrictions and found it sufficiently explained. The court noted that the delay was not intentional and decided to intervene despite the statutory remedy available. The court held that the delay was justified under the circumstances and ordered that the matter be remanded to the Assessing Authority for a fresh decision on merits without any coercive action against the petitioner during the pendency of the case.

2. The High Court observed that the order passed by the Deputy Commissioner of State Tax lacked adherence to the principles of natural justice. The court found that the petitioner was not given a fair opportunity to present their case, and the ex parte order did not provide sufficient reasons for determining the tax amount due. Emphasizing the importance of natural justice, the court quashed the impugned order, the notice issued, and directed the Assessing Authority to decide the case afresh while ensuring a fair hearing and providing an opportunity to submit essential documents. The court also ordered the de-freezing of the petitioner's bank account(s) and set guidelines for further proceedings, including the deposit of a certain percentage of the demand raised.

In conclusion, the High Court intervened in the matter due to the justified delay caused by COVID restrictions and the violation of natural justice principles in the ex parte order. The court set aside the impugned orders, directed a fresh decision on merits, and outlined specific guidelines to ensure a fair process and protect the rights of the petitioner.