GST: Patna HC quashes Ex-parte Assessment Order for Violation of Natural Justice Principles, Stays Recovery Proceedings [Read Order]

In a taxpayer-friendly ruling, a division bench of the Patna High Court comprise of Chief Justice Sanjay Karol and Justice Kumar has quashed an assessment order by the GST department on the ground that no sufficient time for hearing was allowed to the petitioner, and hence, the principles of natural justice are violated.

Staying the recovery proceedings, the bench held that the order is quashed 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 reasons sufficient 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. We also find the authorities not to have adjudicated the matter on the attending facts and circumstances. All issues of fact and law ought to have been dealt with, even if the proceedings were to be ex parte in nature,” the High Court said.

While concluding, the bench held that “having heard learned counsel for the parties as also perused the record made available, we are of the considered view that this Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, we form an opinion 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 reasons sufficient 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. We also find the authorities not to have adjudicated the matter on the attending facts and circumstances. All issues of fact and law ought to have been dealt with, even if the proceedings were to be ex parte in nature.”

M/s Ajay Kumar Singh VS The State of Bihar

CITATION: 2022 TAXSCAN (HC) 110

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