M/S Super Mart (A Sole Proprietor Ship Firm) vs. The Union Of INDIA

Held

The Court held that the impugned orders were bad in law due to violations of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex parte nature of the proceedings. The Court found that no sufficient time was afforded to the petitioner to represent their case and that the orders did not provide sufficient reasoning for determining the amount due. Furthermore, the authorities had not adjudicated the matter on the attending facts and circumstances. Consequently, the Court quashed and set aside the impugned orders dated April 16, 2022, March 16, 2022, February 2, 2021, and February 1, 2021. The Court directed the Assessing Authority to decide the case afresh on merits after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order. The issue of limitation was waived, and no coercive steps were to be taken against the petitioner during the pendency of the proceedings. The Court also directed the de-freezing of the petitioner's bank accounts. 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 Super Mart, challenged multiple orders passed by GST authorities. The primary challenge was to the order dated April 16, 2022, by the Additional Commissioner (Appeal), which refused to rectify a previous order dated March 16, 2022. This previous order had upheld the Assistant Commissioner's order dated February 2, 2021, and the Joint Commissioner's order dated February 1, 2021. These orders had rejected the petitioner's Input Tax Credit (ITC) claim for the financial year 2019-20, amounting to Rs. 17,27,744/-, and imposed tax, interest, and penalty. The petitioner contended that these orders were passed ex parte and without sufficient opportunity for hearing. The revenue, through its counsel, agreed to a remand for fresh adjudication on merits, with no objection to the limitation period not being a bar and no coercive steps being taken during the pendency of the case.

Key Issues

1. Whether the impugned orders dated April 16, 2022, March 16, 2022, February 2, 2021, and February 1, 2021, passed by the Additional Commissioner (Appeal), Assistant Commissioner, and Joint Commissioner, respectively, are liable to be set aside for violating the principles of natural justice, specifically the right to a fair opportunity of hearing, as argued by the petitioner? 2. Whether the ex parte nature of the orders, which allegedly lack sufficient reasoning for determining the due amount, renders them bad in law, as contended by the petitioner? 3. Whether the authorities failed to adjudicate the matter on the attending facts and circumstances, as claimed by the petitioner? Petitioner's Arguments: The petitioner argued that the orders were passed ex parte, denying them a fair opportunity of hearing and sufficient time to present their case. They also contended that the orders lacked sufficient reasoning and failed to address the facts and circumstances of the case. Revenue's Arguments: The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits, without the limitation period being a bar, and with no coercive steps taken against the petitioner during the pendency of the case.