Fair Opportunity of being heard must be given while assessing any liability by authority ex parte in DRC?

Fair Opportunity of being heard must be given while assessing any liability by authority ex parte in DRC?

The Patna High Court bench of Justice S. Kumar has held that fair opportunity must be given by authority for deciding any tax liability order as per principal of natural justice.

FACTS OF THE CASE

The Petitioner is engaged in works contract service in Muzaffarpur , Bihar. On 25th May 2020 , the petitioner has been issued an order by respondent under section 79(1)(c) of?rule 142(1) of Bihar Goods and Services Tax Act,2017 in form no DRC-13 dtd 25th Feb 2022. The petitioner was further served an summary order in form DRC-07 on 4th Mar 2020. Whereby the bank account and other are attached for recovery of demand.

The petitioner in declaration submits by taking reference of case Refex Industries Ltd Vs Assistant Comm. Of?CGST and Central Exicse wherein Madras Hight court held on 6th Jan 2020 that tax liability of any demand/penalty interest can only be discharged from the cash ledger

The petitioner was not given proper opportunity of being heard hence appeal writ to court.

COURT HELD

Considering the facts as recorded, the court held that order appears to be ex parte in nature, and the case should be remanded again as a afresh and during the proceedings no corcieve action shall be taken against the petitioner.

The court declared and reserved the order under the principal of natural justice and order passed is ex parte in nature, no fair opportunity of being heard to be given to petitioner by respondent

Hence the court set aside the order dated 25th Feb 2022 and 4th Mar 2020 of?form?DRC-07 and DRC-13 respectively.

ANALYSIS OF THE JUDGEMENT

The tax payer has to be given fair opportunity of being heard before passing any ex parte order under the provisions of Act by the authority.

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