Raj Kumar Singh Raja Construction Private Limited vs. State Of Bihar Through The Commissioner Of State Tax

Facts

The petitioner, Raj Kumar Singh Raja Construction Private Limited, challenged orders passed by the Joint Commissioner of State Tax (Respondent No. 3) for the tax periods July 2019 and August 2019, and an order by the Additional Commissioner of State Tax (Appeal) (Respondent No. 2) dismissing their appeal. The impugned orders were passed under Section 74 of the Bihar Goods and Services Tax Act, 2017. The petitioner contended that the orders were passed ex parte, without a reasonable opportunity of being heard, and lacked sufficient reasoning. The appeal against the initial order was dismissed by the appellate authority solely on grounds of delay, which the petitioner attributed to COVID-19 restrictions. The revenue stated it had no objection to a remand for fresh adjudication.

Held

The Court quashed and set aside the impugned orders dated 13.02.2021 (passed by Respondent No. 2) and 07.03.2020 and Nil (passed by Respondent No. 3). The Court found that the orders were bad in law due to 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 noted that such orders entail civil consequences. The Court accepted the petitioner's statement that 10% of the total demand had been deposited as a prerequisite for hearing the appeal, and if not, it was to be deposited. The petitioner was also directed to deposit an additional 10% of the demand within four weeks, without prejudice to their rights. 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 and all issues were left open.

Key Issues

1. Whether the orders dated 07.03.2020 and Nil passed by the Joint Commissioner of State Tax under Section 74 of the Bihar Goods and Services Tax Act, 2017, are liable to be quashed for violation of principles of natural justice, specifically the lack of a reasonable opportunity of being heard and for being ex parte without sufficient reasoning? (Section 74, BGST Act). 2. Whether the order dated 13.02.2021 passed by the Additional Commissioner of State Tax (Appeal) dismissing the petitioner's appeal in liminie on the ground of delay is sustainable, considering the COVID-19 restrictions? (Section 107, BGST Act, implicitly). Petitioner's Arguments: The petitioner argued that the orders were passed without affording a fair opportunity of hearing and were ex parte. They also contended that the delay in filing the appeal was sufficiently explained by COVID-19 restrictions. Revenue's Arguments: The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for fresh decision on merits.