Maa Automobiles vs. The Union Of INDIA

Held

The Court held that the impugned orders dated 30.12.2020, 15.02.2021, and 21.07.2022, passed by the Assistant Commissioner of State Tax, Danapur, Patna, were bad in law due to violations of the principles of natural justice. The Court found that the petitioner was not afforded a fair opportunity of hearing and was not given sufficient time to represent its case. Furthermore, the ex parte orders lacked sufficient reasoning to justify the determination of the amount due. Consequently, the Court quashed and set aside the impugned orders. The Court also directed the de-freezing/de-attaching of the petitioner's bank account(s). The matter was remanded to the Assessing Authority to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order within two months. No opinion was expressed on the merits of the case, and all issues were left open. The ratio decidendi is that orders passed in violation of natural justice, particularly without adequate opportunity of hearing and sufficient reasoning, are liable to be set aside.

Facts

The petitioner, Maa Automobiles, challenged several orders passed by the Assistant Commissioner of State Taxes, Danapur Circle, Patna. These orders pertained to the financial year April 2019 to March 2020 and demanded a total of Rs. 23,78,532/-. The petitioner sought to set aside orders dated 30.12.2020 (under Section 61(3) of the Bihar Goods and Services Tax Act, 2017), 15.02.2021 (under Section 79(3) of the Bihar Goods and Services Tax Act, 2017, demanding tax, interest, and penalty), DRC 07 dated 15.02.2021, and DRC 013 dated 21.07.2022. The petitioner stated that approximately Rs. 18,00,000/- of the demanded amount had already been recovered. The Revenue stated it had no objection if the matter was remanded to the Assessing Authority for fresh decision on merits, with no coercive steps during pendency.

Key Issues

1. Whether the impugned orders dated 30.12.2020, 15.02.2021, and 21.07.2022, passed by the Assistant Commissioner of State Tax, Danapur, Patna, are liable to be set aside due to violation of principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to represent its case, as argued by the petitioner? 2. Whether the ex parte orders, which allegedly do not assign sufficient reasons for determining the amount due and payable by the assessee, are bad in law, as contended by the petitioner? The petitioner argued that the orders were passed in violation of the principles of natural justice, specifically that no notice under Section 61(1) and Rule 99 (ASMT 10) was served, and insufficient time was given to present their case. The petitioner also contended that the orders lacked sufficient reasoning for the demand. The Revenue, through its counsel, stated it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits and agreed that no coercive steps would be taken against the petitioner during the pendency of the case.