2022 (1) TMI 661 - HC - GST

High Court quashes communication rejecting appeal under BGST Act, 2017, citing violation of natural justice principles.

M/s Loha Construction Pvt. Ltd. Versus The State of Bihar through the Principal Secretary cum Commissioner, Department of State Taxes, Govt. of Bihar, Patna., The Additional Commissioner of State Taxes (Appeals), Purnea Division, Purnea., The Assistant Commissioner of State Taxes, Saharsa Circle, Saharsa

The High Court quashed the communication rejecting the appeal under the BGST Act, 2017, citing a violation of natural justice principles. The Court also ... Maintainability of petition - availability of alternative remedy - ex-parte order - sufficient opportunity of hearing provided or not - violation of principles of natural justice - HELD THAT:- This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, an opinion is formed that the order is bad in law. This we say so, for two reasons- (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences. The impugned order is set aside - petition allowed. Issues involved:1. Writ petition for quashing communication rejecting appeal under BGST Act, 2017.2. Writ petition to quash duty demand, interest, and penalty under CGST Act, 2017 and BGST Act, 2017.3. Restraining respondents from recovery.4. Impugning order as cryptic and non-speaking.5. Interference by the Court despite statutory remedy.Analysis:1. The petitioner sought a writ to quash the communication rejecting their appeal under the Bihar Goods and Services Tax Act, 2017 (BGST Act, 2017). The High Court noted that the order was passed ex parte without affording the petitioner a fair opportunity of hearing. The Court found the order to be in violation of the principles of natural justice, leading to civil consequences. Consequently, the Court quashed the impugned order dated 18.08.2021 and the order dated 21.01.2021 passed under Section 74 of the BGST Act, 2017.2. Another issue raised in the petition was the demand of duty, interest, and penalty under the Central Goods and Services Tax Act, 2017 (CGST Act, 2017) and the BGST Act, 2017. The Court, after considering the submissions, directed the petitioner to deposit a certain percentage of the total amount as a prerequisite for the appeal. The petitioner was also required to deposit an additional amount within a specified timeline. The Court ordered the de-freezing of the petitioner's bank account(s) and set conditions for further proceedings before the Assessing Authority.3. The petitioner also sought to restrain the respondents from making any recovery during the proceedings. The Court, while disposing of the petition, directed that no coercive steps should be taken against the petitioner during the pendency of the case. It also outlined the procedures and timelines for the petitioner to cooperate with the Assessing Authority in resolving the matter.4. Additionally, the petition challenged the impugned order as cryptic and non-speaking, contrary to Section 107 of the BGST Act, 2017. The Court did not delve into the merits of the case but focused on the procedural irregularities and violation of natural justice principles in the order, leading to its quashing.5. Despite the availability of statutory remedies, the Court asserted its authority to intervene when an order is deemed legally flawed. In this case, the Court found grounds to interfere due to the violation of natural justice principles and the lack of reasoning in the ex parte order. The judgment emphasizes the importance of fair procedures and reasoned decisions in administrative actions, even in matters involving tax disputes.