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

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 May 2019 and August 2019, and an order by the Additional Commissioner of State Tax (Appeal) (Respondent No. 2) dismissing their appeal due to delay. The impugned orders were passed ex parte and allegedly without granting a reasonable opportunity of being heard. The petitioner sought to quash these orders. The appeal to the Additional Commissioner was dismissed on the solitary ground of delay in filing. The Court noted that the delay could be sufficiently explained by COVID-19 restrictions. The Revenue stated it had no objection to the matter being remanded for fresh decision on merits.

Held

The Court held that the impugned orders were bad in law due to two primary reasons: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing afforded to the petitioner, and (b) the orders being ex parte and lacking sufficient reasoning to determine the amount due. The Court emphasized that ex parte orders entailing civil consequences must adhere to natural justice. Consequently, the Court quashed and set aside the order dated 13.02.2021 passed by the Additional Commissioner of State Tax (Appeal) and the order dated 07.03.2020 passed by the Joint Commissioner of State Tax, along with the summary of order dated 07.03.2020. The Court directed the matter to be remanded to the Assessing Authority for a fresh decision on merits, after complying with the principles of natural justice and affording adequate opportunity to all parties. The Court also directed the de-freezing of the petitioner's bank accounts and stipulated that no coercive steps would be taken against the petitioner during the pendency of the proceedings. The Assessing Authority was directed to pass a speaking order within two months. 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 orders dated 07.03.2020 and the summary of 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, for the Tax Period May 2019, are 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? (Petitioner's contention: Yes, the orders were passed ex parte without proper hearing and sufficient reasoning. Revenue's contention: Not recorded.) 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 liable to be quashed, considering the COVID-19 restrictions? (Petitioner's contention: Yes, the delay is attributable to COVID-19 restrictions and the appeal should have been heard on merits. Revenue's contention: No objection to remand.) 3. Whether the order dated Nil, passed by the Joint Commissioner of State Tax under Section 74(9) of the BGST Act for the Tax Period August 2019, is liable to be quashed? (Petitioner's contention: Yes, similar to the May 2019 order, it was passed ex parte without a proper hearing. Revenue's contention: Not recorded.)