M/S Sri Bala Ji Marbles vs. State Of U.P. And Another

Facts

The petitioner, M/s Sri Bala Ji Marbles, is challenging a penalty order dated 07.10.2021, issued in Form GST DRC-01 under Rule 142(1) of the CGST Act. The petitioner claims that this notice was never served upon them. Consequently, an ex-parte order was passed imposing a penalty of Rs. 2,34,450/-. The impugned order was passed by Respondent No. 2, the Assistant Commissioner. The petitioner filed a writ petition before the High Court seeking to set aside this ex-parte order.

Held

The Court held that the impugned order passed by Respondent No. 2, the Assistant Commissioner, was ex-parte. The Court found that, prima facie, the petitioner's claim of non-service of the notice dated 07.10.2021 in Form GST DRC-01 under Rule 142(1) of the CGST Act was valid. Consequently, the Court set aside the ex-parte order. The matter was remanded back to the Assistant Commissioner to pass fresh orders after providing due notice and an adequate opportunity of hearing to the petitioner. The Court also expected the petitioner to cooperate in the proceedings and avoid unnecessary adjournments. No specific amount was decided upon, as the matter was remanded for fresh adjudication.

Key Issues

1. Whether the ex-parte order imposing a penalty of Rs. 2,34,450/- is liable to be set aside on the ground of non-service of notice under Rule 142(1) of the CGST Act? The petitioner argued that the notice dated 07.10.2021, in Form GST DRC-01, was never served upon them, rendering the subsequent ex-parte order invalid. The petitioner relied on the principle that a party must be given due notice and an opportunity to be heard before an adverse order is passed against them. The respondent, State of U.P. and Another, did not record any specific arguments in the judgment. However, the court's decision implies that the respondent's contention, if any, did not overcome the petitioner's claim of non-service of notice.