M/S Ahluwalia Contractors INDIA vs. The Union Of INDIA

Held

The Court held that it was not precluded from interfering with the orders despite the availability of statutory remedies, as the orders appeared ex facie bad in law. The Court found two primary reasons for interference: (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 ex parte nature of the orders which lacked sufficient reasoning for determining the amount due. The Court quashed and set aside the impugned appellate order dated 05.12.2020, the original order dated 19.06.2019, and the demand notice dated 19.06.2019. The Court directed the petitioner to deposit ten percent of the total amount as a prerequisite for hearing the appeal (if not already done) and an additional ten percent of the demand raised before the Assessing Officer within four weeks. These deposits were to be without prejudice to the parties' rights. The Court also directed the de-freezing of the petitioner's bank accounts. 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 merits and all issues were left open.

Facts

The petitioner, M/s Ahluwalia Contractors India, challenged an order dated 05.12.2020 passed by the Additional Commissioner (Appeal), Central Division, Patna, which rejected their appeal against an order dated 19.06.2019 passed by the Assistant Commissioner of Commercial Taxes (GST), Special Circle, Patna, and a demand notice dated 19.06.2019 in Form GST DRC 07. The petitioner contended that both the original order and the appellate order were ex parte and passed in violation of the principles of natural justice, as they were not afforded a fair opportunity of hearing and sufficient time to present their case. The Revenue stated it 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 pendency.

Key Issues

1. Whether the impugned orders dated 05.12.2020 (Appellate Order) and 19.06.2019 (Original Order and Demand Notice) are liable to be quashed and set aside on the ground of violation of principles of natural justice, specifically the right to a fair hearing, as contemplated under the relevant provisions of the GST law and general principles of administrative law? Petitioner's Contentions: The petitioner argued that the orders were ex parte and passed without granting sufficient time or opportunity to present their case, thereby violating the principles of natural justice. They contended that the appellate order, being ex parte, lacked sufficient reasoning to determine the amount due. They relied on the general principles of natural justice. Revenue's Contentions: The Revenue did not contest the petitioner's claim for a remand and agreed to the matter being decided afresh on merits by the Assessing Authority, with no coercive steps against the petitioner.