M/S Future vs. The Union Of INDIA

Held

The Court held that it was not precluded from interfering with the matter despite the statutory remedy, as the orders appeared ex facie bad in law. Two primary reasons were cited: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to present their case; and (b) the ex parte nature of the orders, which lacked sufficient reasoning to decipher how the officer determined the amount due and payable. The Court emphasized that ex parte orders passed in violation of natural justice entail civil consequences. Consequently, the Court quashed and set aside the impugned orders dated January 22, 2021, February 18, 2020, and March 6, 2020. The Court directed the petitioner to deposit 10% of the total amount (if not already deposited) before the next date and an additional 10% of the demand within four weeks, without prejudice to their rights. Bank accounts were ordered to be unfrozen. The petitioner was directed to appear before the Assessing Officer on August 9, 2021, for a fresh assessment, with the Assessing Officer to pass a fresh order expeditiously, preferably within two months, after affording adequate opportunity to all parties. 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 filed a writ petition challenging an order dated January 22, 2021, passed by the Additional Commissioner, State Tax (Appeal), Tirhut Division, Muzaffarpur. This appellate order dismissed the petitioner's appeal against an order dated February 18, 2020, passed by the Assistant Commissioner of State Tax, West Circle, Muzaffarpur, and a summary of order dated March 6, 2020, in Form GST DRC-07. The petitioner contended that these orders were ex parte and passed in violation of principles of natural justice, as they were not afforded sufficient opportunity to present their case. The Revenue stated it had no objection if the matter was remanded for fresh decision, and no coercive steps would be taken against the petitioner during pendency.

Key Issues

1. Whether the impugned orders, passed ex parte, violate the principles of natural justice by not affording a fair opportunity of hearing to the petitioner? 2. Whether the ex parte orders, which entail civil consequences, are bad in law due to insufficient reasoning for determining the amount due and payable by the assessee? Petitioner's Arguments: The petitioner argued that the orders were ex parte and passed without providing sufficient time or opportunity to represent their case, thus violating the principles of natural justice. They also contended that the ex parte orders lacked sufficient reasoning to justify the demand raised against them. Revenue's Arguments: The Revenue stated that it had no objection to the matter being remanded to the Assessing Authority for a fresh decision. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.