M/S Anil Kumar Nair Security Agency,Represented By Its Proprietor Shri Anil Kumar Nair vs. The State Tax Officer

Facts

The petitioner, M/s. Anil Kumar Nair Security Agency, filed a writ petition challenging an ex-parte order passed by the State Tax Officer (R1) on May 17, 2022, for the financial year 2018-19. The petitioner contended that they were unaware of the proceedings as the notice was served only through the online portal. The impugned order was passed without providing the petitioner an opportunity of being heard, thus violating principles of natural justice. The State Tax Officer passed the order, and the banks (R2 and R3) were impleaded as respondents, likely due to attachment of accounts. The amount in dispute is not explicitly stated, but the context implies a tax demand.

Held

The Court held that the ex-parte order passed by the first respondent was violative of the principles of natural justice. The Court acknowledged the petitioner's claim of not being aware of the online notice. Following the submission of the learned Government Advocate, the Court directed the petitioner to deposit 25% of the disputed tax amount within thirty days. Upon compliance, the attachment on the petitioner's Input Tax Credit (ITC) accounts would be raised. The impugned order would stand quashed, and the petitioner would be required to reply to the show cause notice within thirty days thereafter. The first respondent was directed to provide a personal hearing and pass a fresh order within two months. The Court also stipulated that if the petitioner failed to comply with the deposit and reply timelines, the benefit of this order would be recalled, and the original impugned order could be enforced. The issue of the exact quantum of disputed tax was not decided on merits.

Key Issues

1. Whether the ex-parte order passed by the State Tax Officer for the financial year 2018-19 is violative of the principles of natural justice, specifically the right to be heard, as the petitioner claims non-receipt of proper notice through the online portal? (Question of law and fact, turning on principles of natural justice and procedural fairness under GST law). Petitioner's contention: The petitioner argued that the ex-parte order was passed without proper notice, as they were unaware of the online service. They sought to quash the order and be given an opportunity to be heard. Revenue's contention: The learned Government Advocate for the Revenue submitted that in similar matters, relief was granted upon the assessee depositing 25% of the disputed tax amount. No specific statutory provisions or precedents were cited by the Revenue.