M/S Tirhut Agro Agency vs. The Union Of INDIA, Through The Secretary

Facts

The petitioner, M/s Tirhut Agro Agency, challenged an order dated May 13, 2022, passed by the Additional Commissioner (Appeal), Tirhut Division, Muzaffarpur. This order rejected the petitioner's appeal against an order dated March 6, 2020, passed by the Assistant Commissioner of State Tax, East Circle, Muzaffarpur, under Section 73 of the BGST Act, 2017, for the financial year 2018-19. Following the rejection of the appeal, an ex parte order of attachment dated June 8, 2022, was issued by the Assistant Commissioner of State Tax. The petitioner sought relief from the High Court against these orders.

Held

The Court held that the impugned orders were bad in law for two primary reasons: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner, and (b) the ex parte nature of the orders which did not assign sufficient reasons for determining the amount due and payable, failing to adjudicate the matter on the attending facts and circumstances. The Court quashed and set aside the order of the Additional Commissioner (Appeal), the order of the Assistant Commissioner of State Tax under Section 73, the summary of order in Form GST DRC-07, and the ex parte order of attachment. 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 before the Assessing Officer within four weeks. The bank account(s) of the petitioner were ordered to be de-frozen/de-attached 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 parties, and passing a speaking order within two months from 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.

Key Issues

1. Whether the impugned order dated May 13, 2022, passed by the Additional Commissioner (Appeal) 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 represent its case? 2. Whether the ex parte order of attachment dated June 8, 2022, is unsustainable as it lacks sufficient reasoning and was passed without adequately adjudicating the matter on the attending facts and circumstances? Petitioner's arguments: The petitioner contended 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 present their case. They also argued that the ex parte order of attachment lacked sufficient reasoning and failed to adjudicate the matter on merits. Revenue's arguments: The learned counsel for the Revenue stated that they had no objection if the matter was remanded to the Assessing Authority for a fresh decision, and that limitation would not be a bar. They also agreed that the case should be decided on merits and no coercive steps would be taken against the petitioner during the pendency of the case.