M/S Gufic Biosciences Limited vs. The Union Of INDIA

Held

The Court held that it was not precluded from interfering with the statutory remedy as the order appeared ex facie bad in law. Two primary reasons were cited: (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 passed did not assign sufficient reasons, even decipherable from the record, as to how the officer determined the amount due and payable by the assessee. The Court found that an order passed in violation of the principles of natural justice entails civil consequences. Consequently, the Court quashed and set aside both the appellate order dated August 12, 2022, and the original order dated February 6, 2021. The Court directed the de-freezing of the petitioner's bank accounts, if attached. The petitioner was directed to appear before the Assessing Authority on November 2, 2022, for the case to be decided on merits after complying with the principles of natural justice, with adequate opportunity for all parties. The Assessing Authority was directed to pass a speaking order within two months of the petitioner's appearance. No opinion was expressed on the merits of the case, and all issues were left open.

Facts

M/s Gufic Biosciences Limited (the petitioner) filed a writ petition challenging an order dated August 12, 2022, passed by the Additional Commissioner State Tax (Appeal). This appellate order had rejected the petitioner's appeal against an order dated February 6, 2021, passed by the Deputy Commissioner of State Tax. The rejection of the appeal was solely on the grounds of limitation. The petitioner contended that they were not afforded sufficient time to present their case and that the orders lacked sufficient reasoning. The revenue stated that they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps taken against the petitioner during the pendency of the case. The entire demanded amount was stated to have been deposited or recovered.

Key Issues

1. Whether the order passed by the Additional Commissioner State Tax (Appeal) rejecting the petitioner's appeal on the ground of limitation, without affording sufficient opportunity of hearing, violates the principles of natural justice, specifically the right to a fair opportunity of hearing, as contemplated under the relevant provisions of the GST law? 2. Whether the order passed by the Deputy Commissioner of State Tax, which was the subject of the appeal, lacked sufficient reasoning to determine the amount due and payable by the assessee, thereby rendering it bad in law? Petitioner's Arguments: The petitioner argued that the appellate order was bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time to represent their case. They also contended that the original order passed by the Deputy Commissioner did not provide adequate reasons for determining the amount due. Revenue's Arguments: The Revenue stated that they had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits. They also agreed that no coercive steps should be taken against the petitioner during the pendency of the case.