M/S Oasis Creative Construction PVT. LTD. vs. The Union Of INDIA

Facts

The petitioner, M/s Oasis Creative Construction Pvt. Ltd., filed a writ petition before the Patna High Court challenging orders passed by the Assistant Commissioner of State Tax and the Additional Commissioner of State Tax (Appeals). The impugned orders confirmed tax, interest, and penalty imposed by the Assessing Officer. The petitioner sought to quash these orders and restrain coercive recovery actions. The revenue, through its counsel, agreed to a remand to the Assessing Authority for a fresh decision on merits, with no coercive steps to be taken against the petitioner during the pendency of the case. The High Court noted potential violations of natural justice and the ex-parte nature of the orders.

Held

The Court held that the impugned orders were 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 afforded to the petitioner. The Court also found that the orders were passed ex-parte without adequate reasoning to determine the amount due. Consequently, the Court quashed and set aside the impugned orders passed by the Assistant Commissioner and the Additional Commissioner of State Tax (Appeals). The Court directed the petitioner to deposit ten percent of the total amount (if not already deposited as a prerequisite for appeal) and an additional ten percent of the demand raised before the Assessing Officer within four weeks. Bank accounts were 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.

Key Issues

1. Whether the impugned orders passed by the Assistant Commissioner of State Tax under Section 74(9) of the CGST/BGST Act, 2017, and confirmed by the Additional Commissioner of State Tax (Appeals), are liable to be quashed due to violation of the principles of natural justice and lack of sufficient reasoning? Petitioner's contention: The petitioner argued that the orders were passed in violation of the principles of natural justice, as they were not afforded a fair opportunity of hearing and sufficient time to represent their case. They also contended that the orders were passed ex-parte without sufficient reasoning to determine the amount due. Revenue's contention: The Revenue stated that they had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits, and that no coercive steps would be taken against the petitioner during the pendency of the case.