M/S H.R. Builders vs. The Union Of INDIA

Held

The Court held that the impugned orders were bad in law on multiple grounds. Firstly, there was a clear violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and insufficient time was given to present its case. Secondly, the ex parte orders lacked sufficient reasoning to justify the determination of the amount due from the assessee. The Court also found that the authorities had not adjudicated the matter based on the attending facts and circumstances, failing to deal with all issues of fact and law, even in ex parte proceedings. Consequently, the Court quashed and set aside both the appellate order dated September 22, 2020, and the summary of order dated March 6, 2020. The Court directed the petitioner to deposit ten percent of the total amount (if not already done) and an additional ten percent of the demand raised within four weeks. The bank accounts of the petitioner were ordered 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 that it had not expressed any opinion on the merits of the case, leaving all issues open.

Facts

The petitioner, M/s H.R. Builders Chawahi Takki, filed a writ petition challenging an order dated September 22, 2020, passed by the Additional Commissioner of State Taxes (Appeals). This order rejected the petitioner's appeal against a summary of order dated March 6, 2020, issued by the Joint Commissioner of State Taxes. The rejection was based on the non-filing of the certified copy of the assessment orders. Both the original order and the appellate order were ex parte. The tax period in dispute was October 2018 to March 2019, and the action was taken under Section 74 of the GST Act, 2017. The revenue, through its counsel, agreed to a remand for fresh decision without the limitation period being an impediment and without coercive steps.

Key Issues

1. Whether the appellate order dated September 22, 2020, passed by the Additional Commissioner of State Taxes (Appeals) is bad in law due to violation of principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to present its case, and whether the ex parte order lacked sufficient reasoning for determining the amount due? - Petitioner's Contention: The petitioner argued that the orders were ex parte and passed in violation of the principles of natural justice, as no sufficient opportunity of hearing was provided. The orders did not assign sufficient reasons for determining the amount due. - Revenue's Contention: The counsel for the Revenue stated they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with the limitation period not being a bar and no coercive steps being taken against the petitioner during the pendency of the case.