Bipul Singh vs. The State Of Bihar Through The Principal Secretary Cum Commissioner

Held

The Court quashed and set aside the impugned undated ex parte order passed by the Assistant Commissioner of State Taxes, Katihar Circle, for the tax period March 2020. The Court found the order to be bad in law on two grounds: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner, and (b) the order being ex parte and lacking sufficient reasoning to determine the amount due. The Court directed the petitioner to deposit ten percent of the demanded amount within four weeks, without prejudice to the rights of the parties. The bank account(s) of the petitioner were ordered to be de-freezed immediately. The petitioner was directed to appear before the Assessing Authority on September 28, 2021, and the Assessing Authority was directed to decide the case on merits expeditiously, preferably within two months, after complying with the principles of natural justice, affording adequate opportunity to all concerned, and passing a speaking order. No coercive steps were to be taken against the petitioner during this period. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Facts

The petitioner, Bipul Singh, challenged an undated, ex parte order passed by the Assistant Commissioner of State Taxes, Katihar Circle. This order, issued under Section 74(9) of the CGST/BGST Act, 2017, and summarized in Form GST DRC-07 dated October 16, 2021, raised a demand of tax, interest, and penalty amounting to Rs. 632,169/- for the tax period of March 2020. The petitioner contended that the order was passed without sufficient opportunity for hearing and lacked proper reasoning. The Revenue, represented by the learned counsel, agreed to a remand for fresh adjudication.

Key Issues

1. Whether the ex parte order passed by the Assistant Commissioner of State Taxes, Katihar Circle, under Section 74(9) of the CGST/BGST Act, 2017, for the tax period March 2020, is bad in law due to violation of the principles of natural justice, specifically the right to a fair opportunity of hearing? Petitioner's Arguments: The petitioner argued that the order was passed ex parte, without affording sufficient time to represent their case, and lacked adequate reasoning for determining the demand. This violated the principles of natural justice and entailed civil consequences. Revenue's Arguments: The learned counsel for the Revenue stated they had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits. They also agreed that no coercive steps should be taken against the petitioner during the pendency of the case.