M/S Hraday Kumar Yadav vs. The Union Of INDIA

Facts

The petitioner, M/s Hraday Kumar Yadav, filed a writ petition before the Patna High Court challenging an order dated 05.02.2021 passed by the Additional Commissioner (Appeal), Purnea Division. This appellate order had rejected the petitioner's appeal against an order dated 08.03.2020 passed by the Assistant Commissioner of State Tax, Circle Supaul, and a summary of order dated 09.03.2020 in Form GST DRC-07. The sole ground for rejection of the appeal by the appellate authority was that it was barred by limitation. The petitioner contended that the original orders were passed in violation of principles of natural justice, without sufficient opportunity of hearing, and ex parte, lacking sufficient reasoning.

Held

The Court quashed and set aside the impugned order dated 05.02.2021 passed by the Additional Commissioner (Appeal) and the order dated 08.03.2020 passed by the Assistant Commissioner of State Tax, along with the summary of order dated 09.03.2020. The Court found the original orders to be 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 sufficient time for the petitioner to present their case, and (b) the ex parte nature of the orders which did not provide sufficient reasoning for determining the amount due. The Court also noted that the authorities had not adjudicated the matter on the attending facts and circumstances. The Court accepted the Revenue's submission for remand. The Court directed the petitioner to deposit ten percent of the total amount demanded (if not already deposited) and an additional ten percent of the demand within four weeks, without prejudice to the rights of the parties. 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. 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 appellate order dated 05.02.2021, rejecting the petitioner's appeal on the ground of limitation, is bad in law, particularly in light of alleged violations of the principles of natural justice and lack of sufficient reasoning in the original orders? Petitioner's arguments: The petitioner argued that the original orders passed by the Assistant Commissioner of State Tax and the summary of order were passed ex parte, 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 these orders lacked sufficient reasoning to determine the amount due. The petitioner sought to have these orders set aside. 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 on merits, and that limitation would not be a bar. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.