The Patna High Court has recently set aside the ex-parte rejection of the Goods and Services Tax (GST) Input Tax Credit (ITC) claim of National Co-operative Consumer Federation of India Limited owing to the violation of natural justice principles.
The Division Bench of Chief Justice Sanjay Karol and Justice Partha Sarthy observed that, “All issues of fact and law ought to have been dealt with, even if the proceedings were ex parte in nature.”
The petitioner seeked the Writ remedy for issuing directions to the respondent-department to hear the case and for allowing Input Tax Credit (ITC) even on non-reflection of transaction in GSTR-2A.
In the absence of the GST tribunal, the High Court was forced to take up the matter on violation of natural justice principles of fair hearing and lack of adjudication on facts and circumstances.
The petitioner undertook to to additionally deposit ten per cent of the amount of the demand raised before the Assessing Officer. This was directed to be done within four weeks by the Court.
The High Court also directed to unfreeze and de-attach any bank accounts of the petitioner if attached/frozen. It was also directed that no coercive steps such as seizure or arrest be taken against the petitioner.
It was further clarified that no opinions were expressed in regard to the merits of the matter but only the violation of natural justice principles were addressed in the decision. The order rejecting the claim and stating the amound due and payable by the assessee issued in Form GST DRC-07 was thus set aside.
Remanding the matter to the assessing authority, the bench directed that there shall be due notice, chance of fair hearing and due consideration of the facts of the case.
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