Ss Sharma Construction And Infrastructure Private Limited vs. Commissioner Of CGST And Central Excise

Facts

The petitioner, SS Sharma Construction and Infrastructure Private Limited, filed a writ petition challenging a show cause notice dated April 16, 2019, and an order dated July 2, 2021, issued by the Joint Commissioner, CGST & Central Excise, Patna-1. The petitioner contended that service tax, interest, and penalty were imposed without considering their written submissions and supporting documents. 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 the pendency of the case. The Court noted that the impugned order was passed ex parte and in violation of principles of natural justice, as the petitioner was not afforded sufficient time to present their case and the order lacked sufficient reasoning.

Held

The Court held that the impugned order was bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing afforded to the petitioner and the ex parte nature of the order which did not provide sufficient reasoning for the determination of the amount due. The Court quashed and set aside the show cause notice dated April 16, 2019, and the order dated July 2, 2021. 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 their rights. The bank accounts of the petitioner were ordered to be de-frozen. The petitioner was directed to appear before the Assessing Authority on January 28, 2022, and the Assessing Authority was directed to decide the case on merits expeditiously, preferably within two months, after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order. The Court explicitly stated that no opinion was expressed on the merits of the case and all issues were left open.

Key Issues

1. Whether the impugned order dated July 2, 2021, passed by the Joint Commissioner, CGST & Central Excise, Patna-1, is liable to be quashed and set aside on the ground of violation of principles of natural justice, specifically the right to a fair opportunity of hearing and the passing of an ex parte order without sufficient reasoning, as contemplated under the relevant provisions of the CGST Act and Rules? Petitioner's Contention: The petitioner argued that the impugned order was bad in law due to a violation of the principles of natural justice, asserting that they were not given sufficient time to represent their case and that the order was passed ex parte without adequate reasoning to determine the amount due. The petitioner sought to quash the show cause notice and the final order. Revenue's Contention: The learned counsel for the Revenue stated 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.