M/S Gardenia Newtech Developers vs. The Union Of INDIA

Held

The Court quashed and set aside the appellate order dated September 18, 2021, and the assessment orders dated February 5, 2021, and February 6, 2021. The Court found the orders to be 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 orders without sufficient reasoning. The Court also noted that the authorities failed to adjudicate the matter based on the attending facts and circumstances. The Court directed the petitioner to deposit an additional ten percent of the demand raised before the Assessing Officer within four weeks, without prejudice to the rights of the parties. The Court also ordered the de-freezing of the petitioner's bank account(s) and directed the Assessing Authority 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 that it had not expressed any opinion on the merits of the case, leaving all issues open.

Facts

M/s Gardenia Newtech Developers LLP (the petitioner) challenged assessment orders dated February 5, 2021, and February 6, 2021, passed by the Assistant Commissioner of State Tax (Respondent No. 7). These orders imposed a total liability of Rs. 23,43,634/- for the financial year 2019-20, including CGST, SGST, interest, and penalty. The petitioner's appeal against these orders was rejected by the Additional Commissioner, State Tax (Appeals) (Respondent No. 5) on September 18, 2021, due to non-receipt of certified copies. The petitioner sought to quash these orders and sought a fresh assessment considering available invoices and GSTR-3B/GSTR-2A mapping. The revenue, through its counsel, agreed to a remand to the Assessing Authority for a fresh decision on merits, without limitation issues, and without coercive steps.

Key Issues

1. Whether the ex-parte assessment orders dated 05.02.2021 and 06.02.2021, and the subsequent appellate order dated 18.09.2021, are illegal and liable to be quashed? The petitioner argued that the assessment orders were passed ex-parte without sufficient opportunity for hearing and without proper examination of records and supporting materials uploaded on the GST portal. They contended that the calculation of input tax credit was erroneous, leading to incorrect imposition of interest and penalty, and that the difference between GSTR-3B and GSTR-2A did not constitute 'wrongly availed Input' under Section 73/74 of the GST Act, 2017. The petitioner also argued that the appellate authority rejected the appeal on the sole ground of non-receipt of certified copies, ignoring the merits. The revenue stated it had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no limitation issues and no coercive steps during pendency.