M/S Dharamraj Motors vs. The Union Of INDIA

Facts

The petitioner, M/s Dharamraj Motors, through its proprietor Priyanka Kumari, filed a writ petition challenging an order dated November 16, 2022, passed by the Additional Commissioner State Tax (Appeals), Purnia Division. This order rejected the petitioner's appeal against an order dated February 8, 2021, passed by the Assistant Commissioner of State Tax, Saharsa Circle, and a related summary of order in Form GST DRC-07. The appeal was rejected solely on the grounds of being barred by limitation. Both the original order and the summary order were ex parte. The petitioner also sought to quash a notice dated November 3, 2022. The petitioner contended that the delay in filing the appeal was due to COVID-19 restrictions and that the original orders were passed in violation of principles of natural justice, lacking sufficient reasoning.

Held

The Court quashed and set aside the impugned order dated November 16, 2022, passed by the Additional Commissioner State Tax (Appeals), the order dated February 8, 2021, passed by the Assistant Commissioner of State Tax, Saharsa Circle, the summary of order in Form GST DRC-07 dated February 8, 2021, and the notice dated November 3, 2022. The Court found that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. Furthermore, the Court held that the ex parte orders were bad in law due to a violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and the orders lacked sufficient reasoning. The Court accepted the petitioner's statement regarding the deposit of ten percent of the total amount as a prerequisite for hearing the appeal, directing its deposit if not already made. The petitioner was also directed to deposit an additional ten percent of the demand within four weeks. The Court ordered the de-freezing of the petitioner's bank accounts and directed the Assessing Authority to decide the case on merits after complying with the principles of natural justice, affording opportunities for hearing and submission of documents. No coercive steps are to be taken against the petitioner during the pendency of the case. The Assessing Authority is to pass a speaking order within two months from the petitioner's appearance. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Key Issues

1. Whether the appeal filed by the petitioner before the Additional Commissioner State Tax (Appeals) was barred by limitation, considering the circumstances arising from the COVID-19 pandemic? (Question of law) 2. Whether the ex parte orders dated February 8, 2021, passed by the Assistant Commissioner of State Tax, Saharsa Circle, and the summary of order in Form GST DRC-07, were passed in violation of the principles of natural justice, specifically the right to a fair opportunity of hearing and adequate reasoning? (Question of mixed law and fact) Petitioner's Arguments: The petitioner argued that the delay in filing the appeal was sufficiently explained by the COVID-19 restrictions. They further contended that the original orders were passed ex parte without affording a sufficient opportunity to represent their case and lacked adequate reasoning to determine the amount due, thus violating principles of natural justice. The petitioner relied on the general understanding of procedural fairness and the impact of the pandemic on timely compliance. Revenue's Arguments: The Revenue, represented by Dr. K.N. Singh, ASG, and Mr. Vivek Prasad, GP-7, stated they 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 judgment does not record specific arguments from the Revenue regarding the limitation or the validity of the ex parte orders.