Pravin Kumar vs. The State Of Bihar

Held

The Court quashed and set aside the impugned order-in-appeal dated June 29, 2022, the ex-parte assessment order dated March 6, 2020, and the summary of order dated March 7, 2020. The Court found that the orders were bad in law due to the violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex-parte nature of the orders without sufficient reasoning. The Court also noted that the authorities had not adjudicated the matter on the attending facts and circumstances. The Court accepted the petitioner's undertaking to deposit ten percent of the total demand amount before the Assessing Officer within four weeks, in addition to the ten percent already deposited as a prerequisite for appeal hearing. The bank account attachment was directed to be de-frozen immediately. The Assessing Authority was directed 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 of the petitioner's appearance. The Court explicitly stated that it had not expressed any opinion on the merits of the case and all issues were left open. The constitutional validity of Section 16(4) and Rule 61(5) were not decided.

Facts

The petitioner, Pravin Kumar, challenged an order-in-appeal dated June 29, 2022, passed by the Additional Commissioner of State Taxes (Appeal), Darbhanga Division, which dismissed his appeal. This appeal was against an ex-parte assessment order-in-original dated March 6, 2020, and a consequential demand notice dated March 7, 2020, issued by the Assistant Commissioner of State Tax, Darbhanga Circle. The demand notice levied tax amounting to Rs. 1,31,66,796.00, interest of Rs. 6,44,364.00, and penalty of Rs. 13,16,680.00, totaling Rs. 1,51,27,840.00 for the financial year 2018-19. The petitioner also sought quashing of the demand notice and de-attachment of his bank account. Additionally, he challenged the constitutional validity of Section 16(4) of the CGST/BGST Act, 2017, and amended Rule 61(5) of the CGST/BGST Rules, 2017, or their non-applicability to his case.

Key Issues

1. Whether the ex-parte assessment order and the appellate order dismissing the appeal were passed in violation of the principles of natural justice, specifically the right to a fair opportunity of hearing? (Question of law and fact) 2. Whether Section 16(4) of the Central/Bihar Goods and Services Act, 2017, is ultra vires the provisions of Articles 14, 19(1)(g), and 300A of the Constitution of India, and violative of Section 16(1) and (2) and the basic structure of the CGST/BGST Act, 2017? (Question of law) 3. Whether Rule 61(5) of the Central/Bihar Goods and Services Rules, 2017, as amended retrospectively, is ultra vires the provisions of Articles 14, 19(1)(g), and 300A of the Constitution of India, and violative of Section 16(1) and (2) and the basic structure of the CGST/BGST Act, 2017? (Question of law) Petitioner's arguments: The petitioner contended that the assessment order was passed ex-parte without sufficient opportunity of hearing and lacked sufficient reasoning. He also challenged the constitutional validity of Section 16(4) and amended Rule 61(5). Revenue's arguments: The Revenue stated it had no objection if the matter was remanded to the Assessing Authority for fresh decision on merits, without limitation issues hindering the process, and without coercive steps during pendency.