M/S Kunal Ett Udyog vs. The Union Of INDIA

Held

The Court held that the writ application was fully covered by the order of a Coordinate Bench in M/s King Bricks versus State of Bihar. The Court found merit in the petitioner's submission that the assessment was made on an estimation basis and that an adequate opportunity of hearing was not provided, which is a violation of natural justice principles. Consequently, the ex-parte order dated 09.12.2023 and the demand notice in Form DRC-07 were set aside. The matter was remitted back to the Assessing Authority to undertake fresh steps for passing a fresh order strictly in accordance with the provisions of the Bihar Goods and Services Tax Act, 2017, and in light of the cited judgment, after providing an adequate opportunity of hearing to the petitioner. The Assessing Authority was directed to pass a final order within six months from the date of receipt of a copy of this order. The order of attachment of the petitioner's bank account was also quashed. The ratio decidendi is that ex-parte assessments without affording a proper opportunity of hearing are unsustainable and must be set aside, with the matter being remanded for fresh adjudication.

Facts

The petitioner, M/s Kunal ETT Udyog, a sole proprietorship firm engaged in brick manufacturing, filed a writ application challenging an ex-parte order dated 09.12.2023 passed by the Assistant Commissioner of State Tax, Bettiah Circle. This order, issued under Section 73 of the BGST Act, imposed tax, interest, and penalty amounting to Rs. 11,03,518/- for the Financial Year 2018-19. The petitioner also sought to quash the demand notice in Form DRC-07 and the attachment of its bank account. The petitioner argued that the assessment was based on estimation and cited a similar case, M/s King Bricks versus State of Bihar, where the matter was remanded for fresh assessment after providing an opportunity of hearing. The State did not dispute these submissions.

Key Issues

1. Whether the ex-parte order dated 09.12.2023, passed under Section 73 of the BGST Act by the Assistant Commissioner of State Tax, Bettiah Circle, imposing tax, interest, and penalty of Rs. 11,03,518/- for FY 2018-19, is liable to be set aside on the grounds of violation of principles of natural justice and estimation-based assessment without adequate opportunity of hearing? Petitioner's arguments: The petitioner contended that the assessment was made on an estimation basis and that a Coordinate Bench of this Court, in M/s King Bricks versus State of Bihar (C.W.J.C. No. 8948 of 2025), had remanded a similar matter back to the authorities for fresh assessment after granting an adequate opportunity of hearing. Therefore, the present writ application is covered by the said precedent. Revenue/State's arguments: The counsel for the State did not dispute the petitioner's submissions and agreed that the writ petition could be disposed of in light of the judgment in M/s King Bricks versus State of Bihar.