M/S Priyadarshi Construction vs. The Union Of INDIA

Held

The Court held that the impugned orders were bad in law on two primary grounds: violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner, and the ex parte nature of the orders which lacked sufficient reasons for determining the amount due. The Court also found that the authorities had not adjudicated the matter on the attending facts and circumstances, failing to deal with all issues of fact and law. Consequently, the Court quashed and set aside the impugned orders of the Additional Commissioner of State Taxes (Appeals), the summary of order in form GST DRC-07, and the order cancelling the petitioner's registration. The Court directed the petitioner to deposit ten percent of the total amount demanded (if not already deposited) and an additional ten percent of the demand raised before the Assessing Officer within four weeks. Bank accounts were to be de-frozen. The Assessing Authority was directed to decide the case on merits after 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 it had not expressed any opinion on merits, leaving all issues open.

Facts

The petitioner, M/s Priyadarshi Construction, filed a writ petition challenging orders passed by the Additional Commissioner of State Taxes (Appeals) dated September 24, 2022, and September 28, 2022. These orders rejected the petitioner's appeals against a summary of order dated December 7, 2021, issued in form GST DRC-07. The petitioner also sought to quash an order dated July 13, 2021, passed by the Deputy Commissioner of State Taxes, Buxar Circle, which cancelled the petitioner's GST registration. The impugned orders appeared to be ex parte. The Revenue, through its counsel, agreed to a remand to the Assessing Authority for a fresh decision on merits, without objection to limitation, and undertook not to take coercive steps against the petitioner.

Key Issues

1. Whether the impugned orders, passed ex parte, violated the principles of natural justice by not affording a fair opportunity of hearing to the petitioner and by failing to provide sufficient reasons for determining the amount due? 2. Whether the authorities adjudicated the matter on the attending facts and circumstances, or did they fail to deal with all issues of fact and law? Petitioner's arguments: The petitioner contended that the orders were ex parte and passed without sufficient opportunity for hearing, violating principles of natural justice. They also argued that the orders lacked sufficient reasoning to determine the amount due and did not address the attending facts and circumstances. Revenue's arguments: The Revenue stated it had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, agreeing that limitation would not be a bar and no coercive steps would be taken against the petitioner.