M/S Aditya Construction PVT LTD vs. The State Of Bihar

Held

The Court quashed and set aside the impugned order dated 27.10.2021 and the summary of order in Form GST DRC-07 dated 29.10.2021. The Court found the orders to be bad in law primarily on two grounds: (a) violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing with sufficient time to represent their case, and (b) the order lacked sufficient reasons, making it difficult to decipher how the officer determined the amount due and payable. The Court noted that orders passed in violation of natural justice entail civil consequences. Consequently, the Court directed the petitioner to deposit twenty percent of the demand raised within four weeks, without prejudice to the parties' rights, and subject to the final adjudication. The Court also ordered the de-freezing of the petitioner's bank account(s) immediately. The petitioner was directed to appear before the Assessing Authority on 3rd January 2023, and the Assessing Authority was mandated to decide the case on merits after complying with the principles of natural justice, affording opportunities for hearing and submission of documents. The Assessing Authority was to pass a fresh, speaking order within two months of the petitioner's appearance, and no coercive steps were to be taken during the assessment proceedings. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Facts

The petitioner, M/s Aditya Construction Pvt Ltd, filed a writ petition challenging an ex-parte order dated 27.10.2021 passed by the Assistant Commissioner of State Tax, Buxar Circle, Buxar, and a summary of order in Form GST DRC-07 dated 29.10.2021. The petitioner contended that the order ignored Rule 35 of CGST Rules, 2017, and failed to consider that the CGST and SGST tax amounts for November 2020 and March 2021, totaling Rs. 46,70,637 and Rs. 82,70,629 respectively, were paid. The petitioner also sought to direct the respondent to consider GSTR-3B filings showing tax payments of Rs. 4,43,069.41 for CGST and Rs. 4,43,069.41 for SGST for March 2020-21, and to unfreeze their bank account. The petitioner claimed they were not afforded a proper opportunity of hearing.

Key Issues

1. Whether the ex-parte order dated 27.10.2021 and the summary of order dated 29.10.2021, passed by the Assistant Commissioner of State Tax, Buxar Circle, Buxar, are liable to be set aside for violating the principles of natural justice, specifically the right to a fair opportunity of hearing, as mandated by general legal principles and potentially Section 75 of the CGST Act, 2017? 2. Whether the aforementioned orders are liable to be set aside for failing to assign sufficient reasons for determining the amount due and payable by the assessee, thereby rendering them legally unsustainable? Petitioner's Arguments: The petitioner argued that the impugned orders were passed ex-parte without providing a sufficient opportunity for hearing, violating principles of natural justice. They also contended that the tax amounts for November 2020 and March 2021 were paid, and the orders failed to consider this, as well as the details in GSTR-3B. Furthermore, the petitioner argued that their bank account was illegally frozen despite tax payments. Revenue's Arguments: The Revenue, through the learned counsel for the State, stated they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, and no coercive steps would be taken against the petitioner during the pendency of the case.