Alagar vs. The Assistant Commissioner Of GST And Central Excise

Held

The Court allowed the Writ Petition. The impugned Order-in-Original No. 299/2022-ST dated November 11, 2022, was quashed. The Court directed the petitioner to pay an additional 10% of the disputed tax, over and above the Rs. 2,77,700/- already recovered. The 1st respondent was directed to verify the recovery of the Rs. 2,77,700/-. If confirmed, the petitioner would be granted a further opportunity to submit a reply to the show cause notice within 30 days of receiving the order. The impugned order was to be treated as a corrigendum to the original show cause notice. The 1st respondent was mandated to pass a speaking order on merits within 60 days thereafter, after hearing the petitioner. Subject to the petitioner paying the additional 10% of the disputed tax, the 1st respondent was directed to de-freeze the petitioner's bank account. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Alagar, filed a writ petition challenging an Order-in-Original No. 299/2022-ST dated November 11, 2022, passed by the Assistant Commissioner of GST and Central Excise (1st respondent). The petitioner contended that the order was passed in gross violation of principles of natural justice, judicial discipline, and was arbitrary and perverse. The petitioner also sought a direction to the Union Bank of India (2nd respondent) to de-freeze their bank account. The impugned order confirmed a demand proposed in a show cause notice dated October 20, 2021. The petitioner had not replied to this show cause notice. The revenue had recovered Rs. 2,77,700/- from the petitioner's bank account on April 15, 2024.

Key Issues

1. Whether the impugned Order-in-Original No. 299/2022-ST dated November 11, 2022, passed by the 1st respondent is liable to be quashed for violating principles of natural justice, judicial discipline, and being arbitrary and perverse, as contended by the petitioner? 2. Whether the petitioner is entitled to a direction for the de-freezing of their bank account, subject to compliance with the Court's directions? Petitioner's arguments: The petitioner argued that the impugned order was passed without affording them a proper opportunity to be heard, thus violating the principles of natural justice. They also claimed the order was arbitrary and perverse. The petitioner sought the quashing of the order and the de-freezing of their bank account. Revenue's arguments: The revenue's counsel took notice for the first respondent. The judgment indicates that the petitioner had not replied to the show cause notice. The revenue's primary contention, implicitly, would be that the order was passed based on available material due to the lack of response from the petitioner.