M/S Chandini Electricals vs. The Commisisoner Of Central GST And Central Excise

Held

The Court held that the impugned order dated 30.11.2021 passed by the Assistant Commissioner of State Tax, Patna Central Division, was bad in law on two grounds: (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 order failed to assign sufficient reasons for determining the amount due and payable by the assessee. The Court emphasized that an order passed in violation of natural justice entails civil consequences. Consequently, the Court quashed and set aside the impugned order. The Court also directed the petitioner to deposit twenty percent of the demand amount within four weeks, without prejudice to the rights of the parties, and ordered the de-freezing/de-attaching of the petitioner's bank accounts. The Assessing Authority was directed 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 with reasons within two months. No opinion was expressed on the merits of the case, and all issues were left open.

Facts

The petitioner, M/s Chandini Electricals, through its proprietor Mohammad Tahir, filed a writ petition before the Patna High Court challenging an order dated 30.11.2021 passed by the Assistant Commissioner of State Tax, Patna Central Division. This order directed the issuance of a demand notice under DRC-07 for an amount of Rs. 35,21,625/-. The petitioner contended that the order was passed in violation of principles of natural justice, as they were not afforded a fair opportunity of hearing and sufficient time to represent their case. Furthermore, the petitioner argued that the order lacked sufficient reasoning to determine the amount due. The revenue, represented by learned counsel, had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits, with a commitment that no coercive steps would be taken against the petitioner during the pendency of the case.

Key Issues

1. Whether the impugned order dated 30.11.2021, passed by the Assistant Commissioner of State Tax, Patna Central Division, is bad in law due to violation of the principles of natural justice, specifically the right to a fair opportunity of hearing? 2. Whether the impugned order is legally sustainable for failing to assign sufficient reasons for determining the amount due and payable by the petitioner? Petitioner's Arguments: The petitioner argued that the order was bad in law due to a violation of the principles of natural justice, as they were not given adequate time or a fair opportunity to present their case. They also contended that the order did not provide sufficient reasoning for the determination of the demand amount. 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. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.