The Patna High court set aside an order passed under GST in violation of principles of natural justice.
The Petitioner, Pinax Steel Industries Pvt. Ltd. has prayed for issuance of a writ in the nature of certiorari for quashing of the order passed by the respondent Joint Commissioner Of State Taxes, Danapur Circle, Patna as well as the connected demand notice in form GST DRC- 07 in exercise of powers under section 73(9) and section 50 of the Bihar Goods And Service Tax Act, 2017.
The petitioner further pleaded for the issuance of a writ or order or direction specially authority to award an opportunity of filing the comprehensive reply and also of hearing in the proceeding initiated under section 73 of the act and decide the matter afresh after considering all materials and explanation submitted by the petitioner.
Mr. Gautam Kejriwal, counsel for the petitioner stated that without prejudice to the respective rights and contentions of the parties, the petitioner is ready and willing to deposit a sum of Rs. 10 lakh with the appropriate authority within a period of two weeks.
The division bench headed by Chief Justice Sanjay Karol and Prabhat Kumar Singh held that the impugned order passed by the Joint Commissioner of State Taxes, Danapur Circle, Patna needs to be quashed and set aside, for the same to have been passed without following the principles of natural justice. In terms of the impugned order, financial liability stands fastened. Thus, it entails civil consequences, seriously prejudicing the petitioner inasmuch as, without affording any adequate opportunity of hearing or assigning any reason.
However, the court as such, purely on a limited ground quashed and set aside the impugned order passed by the Respondent authority for the period 1st quarter of 2017-18 under Section 73(9) & (50) of Bihar Goods And Service Tax Act, 2017 with further mutually agreeable directions.
Firstly, the petitioner shall deposit a sum of Rs. 10 lacs with the authority on or before 6th February, 2021.
Secondly, the petitioner shall appear before the authority on 6th February, 2021 in his office at 10:30 A.M., on which date he shall place on record additional material, if so required and desired.
Thirdly, also, further opportunity shall be afforded to the parties to place additional material, if so required and desired.
Fourthly, the petitioner undertakes to fully cooperate and not take any unnecessary adjournment.
Fifthly, the authority shall decide the matter on merits, in compliance of the principles of natural justice, on or before 3rd April, 2021.
Sixthly, liberty reserved to the parties to take recourse to such remedies as are otherwise available in accordance with law.
Seventhly, the court has not expressed any opinion on merits and quashed the order only on the ground of violation of principles of natural justice.
Eightly, if necessary, proceedings during the time of Covid-19 Pandemic would be conducted through digital mode.
Lastly, needless to add, with the passing of the order, if it is eventually found that the deposit made by the petitioner is in excess of the amount determined due and payable, the same shall positively be refunded expeditiously as per the provisions of the statute.
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