M/S Nagendra Singh vs. The Union Of INDIA

Held

The Court held that the impugned order dated October 18, 2022, along with the prior orders dated August 2, 2019, and December 7/8, 2021, were bad in law and liable to be quashed and set aside. The primary reasons for this decision were the violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing afforded to the petitioner, and the ex parte nature of the orders which did not provide sufficient reasoning for the determination of the tax liability. The Court found that these orders entailed civil consequences and that the authorities had failed to adjudicate the matter on the attending facts and circumstances. Consequently, the Court quashed and set aside the impugned orders. The Court also directed the petitioner to deposit ten percent of the total demand, if not already done, and an additional ten percent of the demand raised before the Assessing Officer within four weeks. Bank accounts of the petitioner were to be de-frozen. The Assessing Authority was directed to decide the case afresh on merits, complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order within two months of the petitioner's appearance. No coercive steps were to be taken against the petitioner during this period. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Facts

The petitioner, M/s Nagendra Singh NA, filed a writ petition challenging an order dated October 18, 2022, passed by the Additional Commissioner of State Taxes (Appeals), Patna West Division. This order rejected the petitioner's appeal against an order dated August 2, 2019, passed by the Deputy Commissioner of State Tax, Buxar, and subsequent summary orders in Form GST DRC-07 dated December 7 and 8, 2021. The petitioner contended that these orders were ex parte and passed without sufficient opportunity for hearing. The Revenue, through the Additional Solicitor General, agreed to a remand for fresh adjudication on merits, waiving the limitation period and undertaking not to take coercive steps.

Key Issues

1. Whether the impugned order dated October 18, 2022, passed by the Additional Commissioner of State Taxes (Appeals) is bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex parte nature of the order? 2. Whether the ex parte order, which allegedly lacks sufficient reasoning for determining the amount due and payable by the assessee, warrants interference by the High Court despite the availability of statutory remedies? Petitioner's Arguments: The petitioner argued that the orders were passed ex parte, without affording sufficient time or opportunity to present their case. They contended that the principles of natural justice were violated, rendering the orders legally unsustainable. Revenue's Arguments: The Revenue did not contest the petitioner's claim for a remand. They stated they had no objection if the matter was remanded to the Assessing Authority for fresh adjudication on merits, agreeing that the limitation period would not be a bar and no coercive steps would be taken against the petitioner during the pendency of the case.