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2021 (11) TMI 888 - HC - GSTLevy of interest - interest imposed on gross amount without deducting the Input Tax Credit which is already paid by the petitioner - appeal preferred by the petitioner has been rejected without any application of mind to the grounds of appeal raised by the petitioner - violation of principles of natural justice - 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 we say so, 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 subject to conditions agreed upon between parties.
Issues:
1. Quashing of summary order imposing interest under GST Act 2. Rejection of appeal without application of mind 3. Coercive action for recovery of demand 4. Violation of principles of natural justice in ex parte orders Analysis: 1. The petitioner sought relief for quashing a summary order issued under the GST Act, imposing interest on the gross amount without deducting Input Tax Credit. The High Court noted that the order was passed without issuing show cause notices, violating the principles of natural justice. The court found that the order was ex parte and lacked sufficient reasons to determine the amount due. Consequently, the court quashed the impugned orders and directed the petitioner to deposit twenty percent of the demand raised within four weeks, subject to further assessment by the Assessing Officer. 2. The appeal filed by the petitioner was rejected by the Additional Commissioner of State Taxes based on non-receipt of certified copies. The court observed that the rejection was without proper application of mind and in an ex parte manner. Despite the statutory remedy, the court intervened due to the violation of natural justice principles. The court directed the Assessing Authority to decide the case on merits after affording a fair opportunity to both parties and to pass a speaking order with reasons within a specified timeframe. 3. The petitioner also sought a direction to restrain the respondent from taking coercive action for recovery of the demand during the pendency of the case. The court accepted this request and directed that no coercive steps should be taken against the petitioner while the case is ongoing. Additionally, the court ordered the immediate de-freezing or de-attaching of the petitioner's bank account(s) if attached in relation to the proceedings. 4. The High Court emphasized the importance of adhering to natural justice principles and fair hearing procedures. It highlighted that orders passed in violation of these principles have civil consequences. The court, while disposing of the writ petition, set out detailed terms for further proceedings, including the petitioner's cooperation, expeditious decision-making, and the liberty to challenge the order if necessary. The court left all issues open for further examination and reserved the right for parties to seek other legal remedies available to them.
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