Demand Order passed ex-parte against Cement House without considering merits: Patna HC remands GST matter to Assessing Authority [Read Order]

Demand Order - ex-parte against Cement House - Patna HC - GST-taxscan

The Patna High Court has recently set aside the ex-parte Goods and Services Tax (GST) demand order against M/s Cement House for the violation of natural justice principles in passing the order.

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 quash the demand order served on the petitioner without a fair chance of hearing.

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 additionally deposit twenty percent of the amount of the demand raised before the Assessing Officer. This was directed to be done within eight weeks.

The revenue representative ASG K N Singh submitted that no coercive steps would be taken against the assessee and expressed the willingness to hear the matter on merits if remanded.

The High Court also directed to de-freeze 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 demand order and summary of the order 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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