M/S.Bharathi L V Constructions vs. The Deputy / Assistant Commissioner Of GST And Central Excise

Facts

The petitioner, M/s. Bharathi L V Constructions, filed two writ petitions challenging an order-in-original dated January 31, 2022, and a rectification of mistakes order dated March 20, 2023, both issued by the Deputy Assistant Commissioner of GST and Central Excise. The petitioner contended that the order-in-original was passed ex-parte without providing a sufficient opportunity to be heard, as the notice issued by the respondent was not received. The petitioner's bank accounts were attached, and the tax liability, penalty, and interest were recovered. The petitioner argued that there was no revenue loss and sought another opportunity to present their case. The respondent authorities included the Deputy Assistant Commissioner of GST and Central Excise, the Chief Manager of State Bank of India, and the Branch Manager of Canara Bank.

Held

The Court held that the petitioner was entitled to one more opportunity to present their case. The reasoning was based on the petitioner's contention that they were not granted sufficient opportunity to be heard before the order-in-original was passed, and the notice was returned unclaimed. The Court found merit in the plea for a second chance, acknowledging that procedural fairness was paramount. The ratio decidendi is that where a party demonstrates a lack of proper opportunity to be heard, leading to an ex-parte order, the courts may grant a further opportunity to rectify the procedural lapse, especially when constitutional rights are invoked. The operative direction was to allow the petitioner to file an appeal within four weeks from the date of receiving the order, and the appellate authority was directed to consider the appeal within four months thereafter. The issue of whether there was actual revenue loss was not expressly decided.

Key Issues

1. Whether the order-in-original dated 31.01.2022 was passed in gross violation of the principles of natural justice, making it arbitrary and perverse, and thus violative of Articles 14 and 19(1)(g) of the Constitution? 2. Whether the Rectification of Mistakes Order No.01/2023-ST (ROM) dated 20.03.2023 was illegal, arbitrary, and violative of the principles of natural justice? Petitioner's arguments: The petitioner argued that the order-in-original was passed ex-parte without adequate opportunity to be heard, as the notice was not received and returned unclaimed. They contended that the subsequent rectification order was also illegal and arbitrary. The petitioner asserted that there was no revenue loss and sought a fresh opportunity to present their case. They relied on the principles of natural justice and constitutional provisions guaranteeing fair treatment and the right to practice a trade or profession. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or the State. However, their action of issuing the orders and attaching the bank account implies a contention that the petitioner was liable for the dues.