M/S Manoj Kumar Singh vs. The Union Of INDIA

Facts

The petitioner filed a writ petition before the Patna High Court challenging an order dated February 8, 2020, passed by the Joint Commissioner of State Tax, Muzaffarpur, and a summary of the order in Form GST DRC-07 dated March 3, 2020. The petitioner contended that these orders were ex parte and passed in violation of the principles of natural justice, specifically alleging insufficient opportunity to present their case. The Revenue, through its counsel, 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 considered the matter despite the availability of statutory remedies.

Held

The Court held that the impugned order dated February 8, 2020, and the summary of the order in Form GST DRC-07 dated March 3, 2020, were bad in law due to a violation of the principles of natural justice. The Court found that the petitioner was not afforded a fair opportunity of hearing and that sufficient time was not granted for them to represent their case. Furthermore, the ex parte nature of the order meant it did not provide decipherable reasons for determining the amount due. Consequently, the Court quashed and set aside the impugned orders. The Court directed the petitioner to deposit ten percent of the total amount demanded within four weeks, in addition to any amount already deposited, without prejudice to their rights. The bank accounts of the petitioner were to be de-frozen immediately. The petitioner was directed to appear before the Assessing Authority on August 9, 2021, and 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 fresh order expeditiously, preferably 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 and all issues were left open.

Key Issues

1. Whether the impugned order dated February 8, 2020, and the summary of the order in Form GST DRC-07 dated March 3, 2020, passed by the Joint Commissioner of State Tax, Muzaffarpur, are liable to be quashed on the ground of violation of principles of natural justice, specifically the right to a fair opportunity of hearing, as contemplated under the relevant provisions of the GST Act and Rules? Petitioner's contentions: The petitioner argued that the orders were ex parte and that they were not afforded sufficient time to represent their case. They further contended that the ex parte order lacked sufficient reasoning to determine the amount due and payable. The violation of natural justice principles, they argued, entails civil consequences. Revenue's contentions: 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.