Indrajeet Singh @ Indrajit vs. Goods And Service Tax Council Established Under Articel 297 A Of Constitution Of INDIA

Held

The Court held that the impugned order dated 05.03.2020 was bad in law on two grounds: (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 order was passed ex parte without assigning sufficient reasons for determining the amount due. The Court noted that such an order, entailing civil consequences, could be interfered with by the High Court despite the availability of statutory remedies. Consequently, the Court quashed and set aside the impugned order. The Court also directed the de-freezing of the petitioner's bank accounts. The petitioner was directed to deposit ten percent of the total demand amount (if not already deposited) and an additional ten percent within four weeks, without prejudice to the rights of the parties. 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, leaving all issues open.

Facts

The petitioner, Indrajeet Singh, filed a writ petition before the Patna High Court challenging an order of demand dated 05.03.2020, passed by the Assistant Commissioner of State Tax, Muzaffarpur West, Tirhut, Bihar (Respondent No. 4) under Section 73 of the GST Act. The petitioner contended that the order was passed unilaterally without providing an opportunity for a show cause notice or a hearing. The petitioner also sought the quashing of a consequential order freezing the bank accounts of his firm, Ganpati Agro Agency. 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 pendency.

Key Issues

1. Whether the impugned order of demand dated 05.03.2020, passed by the Assistant Commissioner of State Tax under Section 73 of the GST Act, is liable to be quashed and set aside for being passed without providing an opportunity of show cause and hearing to the petitioner? Petitioner's Arguments: The petitioner argued that the order was passed unilaterally and ex parte, violating the principles of natural justice by failing to provide a fair opportunity of hearing and sufficient time to represent his case. The petitioner also argued that the order lacked sufficient reasons to determine the amount due. Revenue's Arguments: The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits.