M/S Sr Electricals vs. The Union Of INDIA

Held

The Court held that the impugned order dated 09.09.2021 was bad in law on two primary 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 present their case; and (b) the ex parte order did not provide sufficient reasons for determining the amount due. The Court also found that the authorities had not adjudicated the matter on the attending facts and circumstances, failing to deal with all issues of fact and law. Consequently, the Court quashed and set aside the impugned order and the earlier orders. The Court directed the petitioner to deposit an additional ten percent of the demand raised within four weeks, without prejudice to the rights of the parties. Bank accounts of the petitioner were ordered to be de-frozen immediately. The Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity to all concerned, and passing a speaking order within two months. 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 SR Electricals (the petitioner) filed a writ petition challenging an order dated 09.09.2021 passed by the Additional Commissioner of State Tax (Appeals), Bhagalpur Division. This order rejected the petitioner's appeal against an earlier order dated 14.11.2019 passed by the Assistant Commissioner of State Tax, Bhagalpur Circle, under Section 62 of the CGST Act, 2017, and a summary of order dated 15.11.2019 in Form GST DRC-07. The appeal was rejected ex parte. The revenue, through its counsel, agreed to a remand for fresh decision by the Assessing Authority, stating that limitation would not be an impediment and the case would be decided on merits, with no coercive steps during pendency. The Court noted that the petitioner had already deposited ten percent of the total amount demanded, which is a prerequisite for appeal hearing.

Key Issues

1. Whether the impugned order dated 09.09.2021, which rejected the petitioner's appeal ex parte, is bad in law due to violation of principles of natural justice and lack of sufficient reasons. Petitioner's Arguments: The petitioner contended that the ex parte rejection of their appeal by the Additional Commissioner of State Tax (Appeals) was illegal. They argued that they were not afforded a fair opportunity of hearing and that the order lacked sufficient reasoning to justify the determination of the amount due. The petitioner also highlighted that the authorities failed to adjudicate the matter based on the attending facts and circumstances. Revenue's Arguments: The Revenue, through its counsel, stated that it had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits. They further agreed that the issue of limitation would not be raised and that no coercive steps would be taken against the petitioner during the pendency of the proceedings.