M/S Magadh Contractors PVT. LTD. vs. The Union Of INDIA

Held

The Court held that it was not precluded from interfering with the matter despite the availability of statutory remedies, as the orders appeared ex facie bad in law. The Court identified two primary reasons for interference: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to represent their case, and (b) the ex parte nature of the order, which did not provide sufficient reasons for determining the amount due. The Court also noted that the authorities had not adjudicated the matter on the attending facts and circumstances. Consequently, the Court quashed and set aside the impugned order dated 14.09.2022 passed by the Additional Commissioner, State Tax (Appeals), and the order dated 16.11.2021 passed by the Assistant Commissioner of State Taxes. The Court directed the de-freezing of the petitioner's bank account and remanded the case to the Assessing Authority for fresh adjudication on merits, after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order. The Court also imposed conditions regarding the deposit of a portion of the demand by the petitioner. No opinion was expressed on the merits of the case.

Facts

The petitioner, M/s Magadh Contractors Pvt. Ltd., filed a writ petition challenging an order dated 16.11.2021, issued in Form GSTR DRC-07, imposing a tax, interest, and penalty of Rs. 5,04,130.00 for the period 2020-21 under Section 74 of the GST Act, 2017. The petitioner also challenged an order dated 14.09.2022, passed by the Additional Commissioner, State Tax (Appeals), which rejected their appeal on the ground of not filing a certified copy of the assessment order within the stipulated time. The petitioner sought quashing of these orders, de-freezing of their bank account, and a direction to restrain coercive recovery actions. The revenue, through the Additional Solicitor General, agreed to a remand for fresh adjudication on merits, without limitation issues, and without coercive steps during the pendency.

Key Issues

1. Whether the order dated 14.09.2022 passed by the Additional Commissioner, State Tax (Appeals), rejecting the petitioner's appeal solely on the ground of non-filing of the certified copy of the assessment order, without considering the merits, is legally sustainable, particularly in light of the principles of natural justice? 2. Whether the original order dated 16.11.2021, issued in Form GSTR DRC-07, imposing tax, interest, and penalty, was passed in violation of the principles of natural justice, specifically regarding the opportunity of hearing and the sufficiency of reasons provided? Petitioner's Arguments: The petitioner contended that the appellate order was passed without application of mind and in violation of natural justice, as it failed to address the merits of the case and was based on a procedural technicality. They also argued that the original order was passed ex parte without sufficient opportunity to be heard and lacked proper reasoning. The petitioner sought quashing of both orders and de-freezing of their bank account. Revenue's Arguments: The learned counsel for the Revenue stated that they had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits, and that limitation would not be a bar. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.