GST: Patna HC quashes Ex-parte Order without Assigning Reasons, De-Freezes Bank Account


GST: Patna HC quashes Ex-parte Order without Assigning Reasons, De-Freezes Bank Account

A division bench of the Patna High Court has quashed an ex-parte order issued by the GST department by holding that the same was issued without assigning reasons or providing sufficient time to defend to the assessee.

A bench was considering a writ petition wherein the petitioner, M/s G. Power Solution, a proprietary firm, has challenged the order of the GST department denying input tax credit by holding that the claim was made after the expiry of the due date.

The petitioner approached the High Court alleging the violation of natural justice principles.

Quashing the order, the High Court observed that notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, we form an opinion that the order is bad in law.

The High court further observed as under:

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 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.”

Directing the petitioner to make payment for pre-deposit, the Court further directed “for de-freezing/de-attaching of the bank account(s) of the writ-petitioner, if attached in reference to the proceedings, subject matter of present petition.

This shall be done immediately.”

The Assessing Authority shall pass a speaking order assigning reasons, copy whereof shall be supplied to the parties,” the Court said