Raj Kumar Singh, Raja Construction Private Limited vs. State Of Bihar

Facts

The petitioner, Raja Construction Private Limited, challenged orders passed by the Joint Commissioner of State Tax (Respondent No. 3) for the tax periods December 2018 and December 2019, and an order by the Additional Commissioner of State Tax (Appeal) (Respondent No. 2) for December 2018. The primary challenge was to the order dated 07.03.2020, passed under Section 74 of the Bihar Goods and Services Tax Act, 2017, which was alleged to be passed without a reasonable opportunity of being heard and without a speaking order. The appeal against this order was dismissed by Respondent No. 2 on 13.02.2021, solely on grounds of delay. The petitioner contended that the delay was sufficiently explained by COVID-19 restrictions. The revenue agreed to a remand for fresh adjudication.

Held

The Court held that the impugned orders were bad in law for two primary reasons: (a) violation of the principles of natural justice, specifically the denial of a fair opportunity of hearing, as insufficient time was afforded to the petitioner to represent their case; and (b) the orders were passed ex parte without assigning sufficient reasons decipherable from the record to justify the determination of the amount due. The Court found that such orders, entailing civil consequences, were unsustainable on these grounds alone. Consequently, the Court quashed and set aside the impugned orders dated 13.02.2021 and 07.03.2020. The Court also directed the petitioner to deposit ten percent of the total amount demanded, if not already deposited, and an additional ten percent of the demand raised before the Assessing Officer within four weeks. Bank accounts were to be de-frozen. 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. 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.

Key Issues

1. Whether the order dated 07.03.2020, passed by the Joint Commissioner of State Tax under Section 74 of the Bihar Goods and Services Tax Act, 2017, is liable to be quashed for violation of principles of natural justice, specifically the lack of a reasonable opportunity of being heard and the absence of a speaking order? 2. Whether the order dated 13.02.2021, passed by the Additional Commissioner of State Tax (Appeal), dismissing the petitioner's appeal on the ground of delay, is sustainable, considering the prevailing COVID-19 restrictions? Petitioner's Arguments: The petitioner argued that the impugned orders were passed ex parte without adequate opportunity to present their case and lacked proper reasoning. They relied on the fact that the delay in filing the appeal was attributable to COVID-19 restrictions. The petitioner sought to quash the orders of the Joint Commissioner and the appellate order. 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 would be taken against the petitioner during the pendency of the case.