Patna High Court quashes GST Order as no Fair opportunity of hearing was afforded [Read Judgment]

The Patna High Court quashed the Goods and Service Tax (GST) Order as no Fair opportunity of hearing was afforded.

The respondent, Assistant Commissioner of State Tax under Section 73(9) of GST Act, 2017 for the tax period 2017-18 and order in Form GST DRC-07 intimated the petitioner, M/s National Enterprises for disallowance of Input Tax Credit and further imposing of tax (including penalty and interest) of an amount of Rs.11,01,707/-.

The Revenue stated that he has no objection if the matter is remanded to the Assessing Authority for deciding the case afresh. Also, the case shall be decided on merits. Also, during the pendency of the case, no coercive steps shall be taken against the petitioner.

The division bench of Chief Justice Sanjay Karol and Justice S. Kumar opined that the order is bad in law for two reasons namely violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case, and the 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 court directed de-freezing or de-attaching of the bank account(s) of the writ-petitioner if attached in reference to the proceedings, subject matter of the present petition. This shall be done immediately.

The court directed the Assessing Authority shall decide the case on merits after complying with the principles of natural justice. The opportunity of the hearing shall be afforded to the parties to place on record all essential documents and materials if so required and desired.

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