M/S. Water Tech Engineers vs. The Union Of INDIA

Held

The Court permitted the petitioner to withdraw the writ application with liberty to file a statutory appeal under Section 107 of the Central Goods and Services Tax/Bihar Goods and Services Tax Act, 2017. The Court held that the period spent by the petitioner in pursuing the writ application before the High Court, from the date of filing (April 9, 2025) until the date of the order (July 15, 2025), shall be excluded in reckoning the period of limitation for filing the appeal. This decision was made considering that the petitioner had approached the High Court within the statutory period of three months for filing an appeal against the impugned order. The Court did not decide on the merits of the petitioner's claim regarding the violation of natural justice or the validity of the ex-parte order.

Facts

The petitioner, M/s. Water Tech Engineers, filed a writ petition before the Patna High Court challenging an ex-parte order dated February 13, 2025, passed by the Assistant Commissioner, Central GST, Central Excise Division, Purnia. The order raised demands totaling Rs. 65,40,024/- for excess availed or unutilized Input Tax Credit, along with interest, a penalty of Rs. 6,54,003/-, late fee and general penalty under Section 47 of the CGST/SGST Act, 2007 amounting to Rs. 2,62,950/-, and tax recovery of Rs. 3,16,278/- for the Financial Year 2020-21. The petitioner contended that the order was passed without granting an opportunity of hearing, violating principles of natural justice and Sections 75(4) & 75(5) of the CGST Act, 2017. The petitioner sought to quash this order and for other consequential reliefs.

Key Issues

1. Whether the ex-parte order dated February 13, 2025, passed by the Assistant Commissioner, Central GST, Central Excise Division, Purnia, is liable to be quashed for being passed in violation of the principles of natural justice and Sections 75(4) & 75(5) of the CGST Act, 2017, by failing to grant an equal opportunity of hearing to the petitioner? Contentions: Petitioner: Argued that the impugned order was passed ex-parte and in utter violation of the principle of natural justice and Sections 75(4) & 75(5) of the CGST Act, 2017. Specifically, the notice sent via email for personal hearing and the time sought for personal hearing were not recorded, and no adjournment was granted as per Section 75(5) of the CGST Act, 2017. Revenue/State: No arguments were recorded for the respondents in the judgment.