Dharmendra Kumar vs. The Union Of INDIA

Held

The Court held that the delay in filing the appeal was sufficiently explained by the COVID-19 restrictions. It further found that both the original order and the appellate order were passed ex parte and suffered from a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the absence of sufficient reasoning to determine the amount due. The Court noted that ex parte orders entailing civil consequences must adhere to these principles. Consequently, the Court quashed and set aside both the appellate order dated 02.03.2021 and the original order dated 05.03.2020. The Court directed the petitioner to deposit 10% of the total demand amount within four weeks, in addition to any amount already deposited. The bank account of the petitioner was ordered to be de-frozen immediately. The Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity for hearing and submission of documents, 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 and all issues were left open.

Facts

The petitioner, Dharmendra Kumar, challenged two orders: an order dated 05.03.2020 by the Joint Commissioner of State Tax, Siwan, directing payment of ₹310494.96 under Section 74 of the GST Act and attachment of his bank account, and an order dated 02.03.2021 by the Additional Commissioner, State Tax (Appeal), Saran, rejecting his appeal. The appellate authority rejected the appeal solely on the grounds of limitation. Both impugned orders were passed ex parte. The petitioner contended that the delay in filing the appeal was due to COVID-19 restrictions and that the orders suffered from statutory violations and lacked sufficient reasoning.

Key Issues

1. Whether the rejection of the petitioner's appeal by the appellate authority solely on the ground of limitation, without considering the explanation for the delay due to COVID-19 restrictions, is legally sustainable? (Question of law turning on principles of natural justice and procedural fairness). 2. Whether the ex parte orders passed by the Joint Commissioner and the appellate authority, which entail civil consequences, are vitiated by a violation of the principles of natural justice, specifically the right to a fair opportunity of hearing and the requirement for reasoned orders? (Question of law turning on principles of natural justice and Section 74 of the GST Act). Petitioner's arguments: The petitioner argued that the delay in filing the appeal was sufficiently explained by the COVID-19 restrictions. He also contended that both the original order and the appellate order were passed ex parte, without affording him a proper opportunity to be heard, and that the orders lacked sufficient reasoning to justify the demand and the rejection of the appeal. He relied on the principles of natural justice. 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 deciding the case afresh on merits. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.